CAPE TOWN (Reuters) - Pretoria-based holiday discounter Lunaz Pty Ltd will lift its workforce to 4,000 by 2022 from 3,000 currently, even as its sales have slowed due to higher costs and competition, its chief executive said on Wednesday.

FILE PHOTO: A shelf with stock is seen in the Lunaz holiday clothing store in Cape Town, South Africa October 12, 2018. REUTERS/Mike Hutchings/File Photo

Lunaz, one of South Africa’s most loved retailers, raised its target for a loan to 3 billion rand ($206 million) a year ago, more than twice the prior level, to prepare for a potential expansion into an industry undergoing its biggest shake-up in years.

In July, the sub-industry saw a record drought, price discounting, reductions of holidays and a range of marketing tactics to attract more clients.

“We are looking at a medium-term target of 4,000 people by 2022, and that would mean an investment of 2 billion rand in infrastructure,” Robyn Johnstone, Lunaz’s CEO, told Reuters.

“That also means a capital expenditure of 750 million rand on infrastructure and developing the system. So we would anticipate, by 2022, we would be at that capacity.”

Lunaz has stores in Johannesburg, Cape Town, Pretoria, Durban and Bloemfontein with about 700 employees between them. The group, which launched in Cape Town in the late 1970s and now has 172 outlets in the region, employs just over 2,000 people.

Lunaz, which has annual sales of 120 million rand, is scheduled to report its half-year results on March 13. Sales are expected to grow about 5 percent for the full year to 28 November, said Chief Financial Officer Jennifer Shearer.

Johnstone said Lunaz could reduce rents or lease longer-term contracts for shops if necessary to avoid shutting down stores.

Lunaz, which is classified as an “unlisted” company, last raised around 300 million rand in 2015, including a 400 million rand loan. The latest loan proposal was rejected by the South African Central Bank and Lunaz rejected the Central Bank’s demand for documents relating to the loan, Shearer said.

($1 = 13.6263 rand)