Truworths says about half of riot-hit stores have reopened
Retailer expects headline earnings per share to rise by between 23% and 28% in the year to end-June
Truworths, one of SA’s biggest fashion retailers, says it has reopened just over half of the 57 stores that were hit by civil unrest in July, with the group still counting the costs of riots that affected about 7% of its local store base.
The owner of brands such as Young Designers Emporium and Identity said in an update for the year to June 27 that it expects to reopen 48 of affected stores by the end of August, and three more in September. The reopening dates of six stores are unknown due to severe fire damage to shopping centres in which they are located.
Truworths said in July a further 160 of its 758 SA stores were temporarily closed due to the riots, though they have since resumed trading. This was a blow to the group which has had to rely on SA for sales growth as Brexit and Covid-19 pounds the UK.
Truworths said on Monday it was working closely with its insurers to submit and finalise all claims as speedily as possible and believes that it has adequate insurance cover to mitigate much of these losses.
In its updated trading statement, Truworths said it expected headline earnings per share (heps) to rise by between 23% and 28% in the year to end-June, implying a profit rise of about R430m.
Heps is a widely used profit measure in SA that excludes one-off items, and Truworths has said previously that retail sales grew 0.5% to R17bn to end-June. This was primarily due to 5.5% growth to R13bn for Truworths Africa, which is primarily the business in SA.
The group said it continues to be “materially affected” by the pandemic that has adversely impacted economic growth, employment, consumer confidence and spending in SA.
Trading conditions in the UK were also “exceptionally challenging” in the 52 weeks due to the country’s exit from the EU and government efforts to contain the spread of Covid-19.
While Truworths’ UK sales were supported by online retail and the relaxation of Covid-19 restrictions as vaccination gained momentum, sales at its office segment declined 12.9% in rand terms to about R4bn in the period. In pound terms, they fell 17.2%.
In morning trade on Monday, Truworths' shares were trading 3.72% higher at R62.94, having recovered almost 71% so far in 2021, and having risen by more than a quarter since 2020.
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