eBusiness Weekly
Tawanda Musarurwa
With low disposable incomes becoming the order of the day, listed clothing retailer Truworths expectedly took a knock in sales during the first quarter to October 6, 2019.
In its latest trading update, Truworths said units sold during the period under review were down 68 percent from the prior comparable period.
This was on the back of “high inflationary conditions, shortages of foreign exchange, severe erosion of consumer disposable incomes persisted in the first quarter,” said management.
Employment costs during the quarter accounted for 22,6 percent of turnover (in nominal terms), slightly down from 22,7 percent in the same period last year.
Occupancy costs accounted for 12,3 percent of turnover, an improvement from 14,2 percent last year, while transport and distribution costs worsened to 6,5 percent of turnover from 3,2 percent previously.
And information technology (IT) costs accounted for 2,4 percent of turnover, up from 1,4 percent same period last year.
Although most key trading expenses were higher from last year, management said in nominal terms, the quarter was profitable, with an improvement in margins, which was perhaps a result of key adjustments on the group’s interest charge policy.
“A monthly interest charge on the 6-month book was introduced with effect from September 1, 2019.
“Monthly interest rates on the 12-month book were increased in line with lending rates in the economy,” said management.
Going forward, the group expects an improvement in demand due to the festive and is focusing on being adequately stocked.
“The business has entered the traditionally busy Christmas period and is adequately stocked for the anticipated levels of trading,” said the group.
“In the medium-term, management will focus on product availability and affordability with emphasis on in-house manufacture especially where fabrics are sourced locally with no direct foreign exchange input.”
