New brands adding to profits
Truworths was another retailer with a trading update and here like-for-like growth was down 3%, while product inflation was 15.5%. So a very large dent in sales. It does have several new brands adding to the profits. Although the weaker pound is hurting the Office acquisition, the pound won’t be weak forever. I always comment that large acquisitions, such as Office (and David Jones with Woolies) are never as great or as quick to add profits as management says, but given time, good management will do good deals that will add value. Overall, while retailer updates have been bleak, share prices have either stayed flat or bounced higher as the market either thinks the worst is behind us, or that the updates were not as bad as expected.