Lat­est fashion vic­tim

Financial Mail - - DIAMONDS & DOGS -

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.

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