Truworths sales down 26,9pc Truworths

TruworthsConrad Mwanawashe Business Reporter
TRUWORTHS’ October sales are down 26,9 percent against a high base in the same period last year when the textile company launched its credit card. Credit card sales are now contributing 20 percent to sales and Truworths chief executive officer Mr Bekithemba Ndebele said the card is a “good book”.

In a trading update to shareholders at the company’s annual general meeting yesterday, Mr Ndebele said sales for the four months to October are down on the comparative period last year.

“This is against a high base in October 2013 when we launched the credit card,” said Mr Ndebele.

“The sales in the month of October last year were higher than November 2013 and traditionally November is higher than October due to the start of the Christmas trading in November,” he said.

He however, said that the cycle will “correct itself”.

Mr Ndebele expects a buoyant Christmas trading but not at the same level as last year due to poor disposable incomes and a significant segment of the market getting paid on December 24.

Trading expenses for the four months to October are nine percent down on the same period last year.

On employment costs, Truworths reported a head count for its stores at 4,8 percent lower than the same period last year and three percent lower for the head office. The company expects further decline on the headquarters head count going forward.

The debtors’ book in the period under review performed in line with management expectations. Most of the debts were collected through summons rather than customers walking in to pay “and this deprived the company of interest income.”

“Recovering through the summons route has limitations on interest income as the company will be forced to charge a standard five percent fee.

“Overall, the base for good customers is shrinking,” said Mr Ndebele.

He said customers on current are servicing their accounts but when they fall behind it becomes difficult for them to catch up due to the low disposable income.

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