Truworths to close 6 Number 1 chain stores
CLOTHING retailer, Truworths Limited, says it will close down six Number 1 chain stores by December, as volumes and market share keep shrinking.
The Zimbabwe Stock Exchange-listed retailer had already closed two Number 1 Stores at the end of the 2015 financial year, as the cash business kept waning.
Chief executive Themba Ndebele told analysts last week that the group would certainly close six more Number 1 Stores by year end in line with the deteriorating macro-economic and business conditions.
“At this point Truworths and Topics will not be affected, but closures will be in the Number 1 chain. It is an unprofitable sector of the market.
“Certain locations will remain open, but in some locations we have to close, especially down town,” he said.
Truworths operates 24 Number 1 Stores, 27 Topics outlets and 16 Truworths branded chain stores.
Truworths slumped to a $1,3 million loss, its first since dollarisation, for the full year period to July this year, as aggregate demand declined.
The retailer also noted that customers shifted to purchasing single units as opposed to packs, which depressed the average spending per customer.
The group CEO pointed out that the most difficult market for the retailer is Harare due to high rental costs and this is the market space where down turn in turnover has been most significant for the group.
He said there are certain factors, especially developments in the economy, which the group cannot control, but that it would focus on areas where it has control, which is containment of costs.
This has seen the group rationalise its staff, which has come down from 635 in 2015 to 511 this year while working days for head office staff were cut to four resulting in a 20 percent cut on the wage bill.
Trading expenses, the group said, decreased by 4,2 percent compared to the prior period.
Excluding trade receivables 2,8 percent.
Truworths said management will continue to work on cost reduction while management of trade receivables will also remain key. costs, expenses fell