Truworths wants to focus more on account offerings
JOHANNESBURG – Clothing retailer Truworths is to focus more on its account offerings after sales in the category increased 5 percent in the first 17 weeks of its 2020 financial year to constitute 52 percent of retail sales.
In a trading update yesterday for the 18 weeks to November 4, Truworths said retail sales Africa increased by 2 percent to R6.3 billion.
Cash sales fell by 1 percent over the same period. It said the percentage of active account holders able to purchase and overdue balances as a percentage of gross trade receivables were at 85 and 13 percent, respectively.
“Although the trading environment is expected to remain challenging, the group continues to utilise its extensive experience to manage the risk of fashion through its proven merchandise design and buying processes, and manage the risk of the book through continuing to apply strategies to ensure the on-going health of the portfolio,” the group said.
Retail sales for the group’s UK-based Office segment were unchanged in sterling terms at £95 million (R1.81bn).
The group said in rand terms, retail sales for subsidiary Office decreased by 1 percent to R1.7bn.
Office’s trading space decreased by 7 percent, compared with the prior period and was expected to decrease by 5 percent for the full 2020 financial period as the Office continued to exit unprofitable space.
Truworths in July told investors that it had approached lenders to embark on steps to restructure the R801m debt of its UK-based Office shoe brand, whose operational performance has continued to deteriorate.
The UK’s Sky News broke the story that Truworths had asked advisers to draw up a company voluntary arrangement that could see the closure of some of its roughly 100 UK stores.
Office accounts for 27 percent of Truworths revenue and 10 percent to profit, whereas the South African division contributed 73 percent to revenue and almost 90 percent to profit.
Truworths shares closed 1.98 percent lower at R52.52 on the JSE yesterday.