JOHANNESBRUG - LOCKDOWN curbs to stop the spread of the Covid-19 pandemic exacerbated by loss of incomes are expected to continue to hurt South Africa’s major fashion retailers in the near term.
Truworths, The Foschini Group (TFG) and Mr Price recorded lower turnover and retail sales this week on the lockdown restrictions.
TFG, which operates more than 4 083 outlets in South Africa, the UK and Australia, yesterday posted a 26.1 percent decline in turnover during the six months ended September at R12.5 billion after losing eight weeks of turnover in April and May due to the closures of most of its trading outlets.
TFG said that more lockdowns announced in certain states of Australia, the UK and other global markets would continue to adversely impact its trade performance well into the second half of this year.
“The outlook for trading conditions remain uncertain as consumer confidence remains under pressure and further lockdowns as a result of the second wave of Covid-19 infections have already been experienced in TFG Australia and are currently being experienced in TFG London,” said TFG.
The group withheld its interim dividend on the current subdued economic environment and the heightened levels of uncertainty posed. It had declared an interim dividend of 335 cents a year earlier.
On the upside, the restricted foot traffic in shopping centres as a result of the lockdown boosted online sales by 152 percent and contributed 14.4 percent to total group turnover, up from an 8.5 percent contribution in the comparative six-month period.
Truworths said retail sales were 10 percent less during the first 18 trading weeks of the 2021 financial period (between June 29 and November 1) at R5.7bn compared a year earlier as both of the group’s main markets, South Africa and the UK, continued to be affected by the Covid-19 pandemic.
“While lockdown restrictions in South Africa have been relaxed gradually over the last five months, the UK is entering a second national lockdown from today until December 2 as the second wave of the pandemic is starting to be experienced in the northern hemisphere,” said Truworths.
Truworths said retail sales for Truworths Africa which comprised mostly Truworths businesses in South Africa fell by 9 percent to R4.2bn relative to the prior period’s R4.6bn.
Mr Price said on Tuesday that it had lost R1.8bn in sales due to the closure of its stores during the nationwide lockdown between March 27 and April 30, and subsequent trade restrictions due to the Covid-19 pandemic.
Mr Price said that the current economic conditions had required an increase in the impairment of the group debtors’ book to 15.2 percent.
BUSINESS REPORT