Credit growth bolsters Truworths’ fortunes
Announcing its unaudited financial results early this week, fashion house Truworths is enjoying a good run with retail sales equating N$6.2 billion over a period of just 26 weeks into its financial year.
Half year results are expected to be announced 15 February. With several stores in Namibia and ever increasing household indebtedness, a review of the credit environment and an expected rise in interest rates meant to curtail spending, the outlook appeared cautious going forward with consumer spending remaining under pressure. A silver lining is in sight however with a slight improvement anticipated in 2015.
“Several strategic projects are currently under way, aimed at ensuring continued growth and expansion. In the merchandise area we plan to offer a wider spread of price points across all ranges and brands; realign the fashion statement across our product offering, window dressing and in-store display; as well as continuing to shorten lead times for local and imported merchandise to increase fashionability,” said Michael Mark, Chief Executive Officer of Truworths International. A number of initiatives are currently under review to respond to changes in the credit environment. Said Mark, “The Group began tightening its credit granting criteria in the second half of calendar 2012 in response to the deterioration in the country’s credit environment. Credit policy was further tightened during 2013.
This has limited the growth in the Group’s active account base to 1% (2013: 6%) in 2014.” With various expansions under review in the Sub-Saharan Africa region, a new integrated concept store design will be launched in the 2015 financial period according to Mark. He added, “The Group’s strategy is to expand incrementally into the rest of Africa country by country, gaining insight into the local trading environment and market potential. 2014 has been a period of consolidation for the African operations as management focused on improving the performance of the existing stores.”
Two Truworths stores in Namibia were opened in 2014. “We are planning rapid expansion of Identity, Uzzi and kids wear, while continuing to follow a conservative and cautious approach to expansion in the rest of Africa,” said Mark adding that capital expenditure totalling N$448 million has been set aside for the 2015 financial period.