Truworths’ first-half sales up 8%

Fashion retailer Truworths says its total sales grew 8% to R12.2bn in the six months ended December, boosted by the UK business, which countered the stagnation in its core SA market.

Its Office shoe chain in the UK grew sales 16%, or 33% in rand terms, to R3.1bn, benefiting from what the company said were its unique market positioning, brand partnerships and strong online presence.

Online sales contributed about 47% of Office’s retail sales during the reporting period, up from 44% in the same period a year ago. However, sales in the mainstay SA business fell 0.3% to R8.4bn after Truworths tightened the screws on credit in light of the apparent deterioration in the macroeconomic picture, which played out in the erosion of consumers’ disposable income. More than twothirds of its SA customers buy on credit while cash sales make up the balance.

The muted sales volumes was also against a high base set in the previous comparable period when sales rose 13.4%, according to Truworths, which owns an assortment of clothing brands, including Daniel Hechter and Identity.

“Credit extension declined as scorecards reacted to the deteriorating credit health of the SA consumer, thereby weighing negatively on credit sales,” the company said in a statement.

“Furthermore, port congestion challenges in SA resulted in lower-than-expected merchandise deliveries for the December period,” it said.

Account sales, comprising 70% of retail sales, were unchanged and cash sales dropped 0.9% year on year.

Against that backdrop, Truworths expects headline earnings per share to rise by up to 4% on an annual basis.

For the three months ended December, group retail sales dropped 1.6% to R4bn.

Its shares were up 1.40% to R76.02 in early trade on the JSE, having risen nearly 13% on a one-year view, according to data compiled by Infront.