The Truworths group has announced that it will be launching a new value-focused chain to gain entry into the lower end of the South African fashion market.

This means that the group will be competing on the same playing field as long time value fashion retailers like Mr Price, Pep stores and Jet.

The Truworths group said there will be an increased focus on value and in-demand products by increasing the range of promotional items, and committed to strong growth in e-commerce which will further support its medium-term performance.

It said its group retail sales for the 26 weeks ended 27 December 2020 decreased by 8.5% to R9.7 billion compared to R10.6 billion reported for the same period in 2019. Account sales decreased by 10.3% and cash sales decreased by 6.5%, relative to the prior period.

Truworths has an Africa segment and a UK-based office segment. Retail sales for Truworths Africa decreased by 6.8% to R7.3 billion, with account sales decreasing by 10.3% and cash sales increasing by 1.9%.

The group said online sales delivered a strong performance, growing by more than 150% relative to the prior period, now comprising 2% of Truworths Africa's retail sales.

Retail sales for the UK-based office segment decreased in sterling terms by 24.6% to £114 million. In Rand terms, retail sales  decreased by 13.3% to R2.4 billion. Online sales contributed approximately 59% of retail sales for the period.

The group closed a total of 40 stores across all brands and now has 896 stores.

The directors of the group have resolved to declare a gross cash dividend from retained earnings to the amount of 232 South African cents per ordinary share.

Succession

With CEO, Micheal Mark set to retire soon and CFO and COO David Pfaff resigning in 2020, Truworths has started the process of implementing the succession plan for the group.

Truworths said the board has commenced the process to appoint a successor for Pfaff whose resignation comes into effect from 28 February 2021.

The group announced that Sarah Proudfoot, an executive director of the group, and an employee since 2001, has been appointed deputy managing director of the group's main operating subsidiary Truworths Limited, a position which has been recently created. 

Fin24