Fashion and home goods retailer Trueworth has reported an 8.2% rise in group retail sales for the 26 weeks to December 2023, thanks to a strong performance from its UK-based office 'athleisure' retail chain. This is expected to be R12.2 billion.
Office London's retail sales increased by 15.6% in pound terms to £162 million and by 33.1% in rand terms to R3.8 billion, benefiting from strong online sales.
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“Office continues to benefit from its unique market positioning, brand partnerships and strong online presence,” Trueworth told investors in a trading update on Monday.
“Online sales accounted for approximately 47% of Office's retail sales this quarter, up from 44% in the prior quarter.”
The company's share price rose more than 1% on Monday to close at R75.79 per share following the release of the trading update.
SA consumers are in a pinch
Back at home, the JSE-listed retailer, which owns the Truworths, Naartjie, Loads of Living and Office London brands, was not so lucky as consumers continued to feel the pinch of high interest rates and an inflationary environment.
Retail sales for the core Trueworth Africa business decreased by 0.3% to R8.4 billion.
The group noted that this was influenced by the high level of the same period last year, when sales increased by 13.4%.
“Retail sales were affected by weak economic conditions and high interest rates, which led to lower disposable income and weaker consumer confidence,” Trueworth said.
“Credit extensions declined as the scorecard reacted to the deteriorating credit health of South African consumers, thereby weighing negatively on credit sales.”
Read: SA online retail could grow by 10% – Bob Shop owner
Unlike other retailers that reported an increase in retail sales during the Christmas shopping season, when consumer spending restrictions tend to ease, Trueworth said retail sales increased over the past nine weeks from October to December. It was pointed out that there was a decrease of 1.6%.
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December results were also affected by continued congestion at the country's ports, which the retailer said led to “less than expected product deliveries in December.”
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Trueworth is not the first retailer to sound the alarm about the impact of port congestion on its business. Woolworths and Foschini raised similar concerns in recent updates they released to the market.
Read: Trading outlook fragile as festival sales disappoint
Sluggish profits
Trueworth told investors that it expects interim earnings per share to increase by up to 4% to 515 cents per share for the current period, from 494.6 cents in the same period last year, due to the weak performance in its core business.
Earnings per share could increase by up to 5% to 535 cents from 509 cents a year ago.
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