Latest fashion victim
Woolworths has picked up a similar fashion affliction to the one that’s plagued its distant cousin, Marks & Spencer, in recent years. Having built up a loyal following for reasonably priced, decent quality cashmere cardigans and dependable 100% cotton gussets, it has unaccountably decided to spice up its offering, thus alienating its core customer base of ladies whose days of besporting themselves in spandex thongs are a distant memory. They have voted with their sensibly shod feet, and sales have plunged.
The company’s plan was to take a chunk out of younger, edgier brands, but the younger, edgier customers proved unwilling to be shifted from their usual haunts to a brand they associate with outfits Grandma would wear to church on a Sunday. Woolworths has been forced to abandon this battlefield and go back to doing what it used to do so successfully.
Fortunately for shareholders, the food division has continued to perform well, sticking to its upmarket customer base and providing dependably excellent quality.
Woolworths is by no means the first SA outfit to return from a foray into Australia with a bloody nose, but the R6.9bn impairment of its David Jones operation has proved more expensive than most. It incurred significant costs and disruption during the year from various transformation issues, including new merchandise and finance systems, a new online platform, a head office move and the refurbishment of its Elizabeth Street store. But sales have started to pick up in the new year. Now the challenge is to go back to basics and deliver.