eBusiness Weekly
Business Writer
C
lothing retailer Truworths says it will focus on growing profitability sustainably through increasing cash sales.
Bekithemba Ndebele, the group’s chief executive said consumer incomes have not recovered to pre-devaluation levels hence the Group will remain cautious on credit-granting.
“Group sales were 64,9 percent cash and 35,1 percent credit,” he said in a statement of financials for the full year ended July 11, 2021.
He noted that the second half of the reporting period was affected by the closure of the business for two months in January and February due to Covid-19 lockdowns as the business was classified as non-essential.
“The closure of the business in January and February resulted in a loss of sales for the two months.
“In the absence of a relief package, the business incurred the full operating costs for the months of January and February which resulted in a Trading Loss for the quarter and half year,” Ndebele said.
According to the financials, during the half-year period ended January 10, 2021, sales were 23 percent lower. Sales picked 18,1 percent during the fourth quarter.
On merchandise performance, Ndebele said due to the lockdown in January and February, the factory did not receive the specialised winter fabrics for garment manufacture.
He said the retail chains relied on purchasing the limited and non-exclusive ranges from local manufacturers.
“Stock turnovers were good and there were no markdowns. Gross margins were firm,” he said.
In terms of credit management, Ndebele said the book grew by 152,8 percent and 84,8 percent of the customers were in good standing and able to purchase compared to 80,3 percent in the prior year.
“The doubtful debt allowance as a percentage of gross debtors was 6,7 percent compared to 13,4 percent in the prior year.
The company’s revenue for the year amounted to $286 million, lower than $341 million prior year.
Sales of merchandise grossed $248 million during the year while retail sales were at $244 million. Factory sales to third parties were at $4 million.
Truworths Limited is a leading fashion retailer operating over 64 branches across Zimbabwe under the Truworths, Topics and Number 1 brands.
The country’s clothing sector has over the years decreed serious competition from second-hand wear and cheap imports that have hit formal retailers hard.
Second-hand clothes are mainly smuggled into the country from Mozambique while cheaper imports from South Africa and Botswana have also become a hit on the market. This is in addition to massive shipments from China and Dubai which are mainly sold from vehicle boots on street pavements.
The Government has in the past banned the importation and sale of second-hand clothing.
