BUSINESS MAVERICK: Adapt or Die: Truworths and Woolies must bow to the consumer

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BUSINESS MAVERICK: Adapt or Die: Truworths and Woolies must bow to the consumer By Sasha Planting

Trading conditions in the retail space have seldom been more difficult, with Brexit in the UK, load shedding and economic malaise in SA, bushfires in Australia and the coronavirus from China all wreaking havoc on retail sales.

The performance from Fashion, Beauty and Home fell by a disappointing 8.9% to R834-million. In Australia, David Jones’ results were nothing short of calamitous, falling 58.2% to R197-million while Country Road fell 9.7%. That said, there is reason to be optimistic. The core Woolworths business is solid. Work has been done to reposition FBH, although “we can sharpen the pencil on pricing,” Moir admits.

Truworths CEO Michael Mark echoes this sentiment. In a conversation with Lindsay Williams for the podcast series“It is tough in South Africa, but in the UK it is even more so.”Truworths, once a retail darling, also saw its share fall precipitously after it wrote down the value of footwear firm Office byGroup sales were up 1.3% to R10.6-billion. Operating profit decreased 2.3% to R2.3-billion, largely due to losses in the UK.Unlike Woolies, where net debt is R11.

Both firms have stressed the importance of online shopping, particularly in their international operations. In SA, the online channel is growing fast but off a smaller base. Woolies’ fashion, beauty and home business saw online sales increase by 29% in the period, while food sales grew by 22%.

 

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