Tue, 09 Mar 2021

Covid-19 continues to knock Truworths' sales

News24
16 Jan 2021, 04:12 GMT+10

  • Truworths says the Covid-19 pandemic continues to materially impact on its operations in South Africa and the UK.
  • The clothing retailer's sales declined by 8.5% for the 26 weeks ended 27 December 2020, it will release its interim results in February.
  • Apart from the lockdown, uncertainty over Brexit has also impacted on trading conditions in the UK.

Clothing retailer Truworths says the Covid-19 pandemic continues to materially impact its main markets, South Africa and the UK.

Truworths on Friday issued a business update for the 26-weeks ended 27 December 2020, shortly after markets closed. Amid challenging trade conditions, the group estimates its headline earnings per share to decrease between 4% and 9% (between 332 cents and 350 cents) compared to the previous year's 364.9 cents.

Truworths said although further hard lockdown restrictions had not been introduced in South Africa since retailers were allowed to reopen stores in May 2020, consumer spending is still subdued given the economic crisis brought on by the pandemic.

Further ashore, its operations in the UK are impacted by lockdown restrictions and uncertainty over Brexit.

"In the UK, trading conditions have been exceptionally challenging amidst Brexit uncertainty, with the group's stores having to close from 5 November 2020 to 2 December 2020 (except for 'click & collect' orders) as all non-essential retail activity was suspended in an attempt to curb the spread of the virus," the notice read.

"The government has again imposed a national lockdown in January 2021 forcing the Group to close its stores in the UK," it added.

According to the business update, overall group retail sales declined 8.5% to R9.7 billion for the period, compared to the same period last year.

Account sales made up the majority (51%) of group retail sales, but it also suffered a decline of 10.3%. Cash sales declined 6.5% compared to the same period last year.

Sales specific to Truworths Africa - comprising of businesses in South Africa- declined 6.8%, compared to the same period last year. "Trading space decreased by 1% relative to the prior period and is expected to remain unchanged for the 2021 financial year," the notice read.

The UK-based Office saw retail sales declined 13.3% in rand terms. Online sales contribute to 59% of retail sales in this segment, compared to 34% recorded last year.

In turn trading space for the segment decreased by 17%. It is expected to decrease by 21% for the 2021 financial year.

Truworths will release its interim results by Thursday 18 February 2021.

Source: News24

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