Truworths eyes UK opportunity
Truworths International targets expansion in the UK as it enters into talks with a fashion footwear retailer as part of its growth bid.
|||Johannesburg - Truworths International is targeting expansion in the UK as it enters into talks with a fashion footwear retailer as part of its growth bid.
The JSE-listed company this morning told shareholders it had entered into “preliminary non-binding negotiations” over a possible acquisition of Office Retail Group.
Office is a fashion footwear retailer based mostly in the United Kingdom, which offers men’s, women’s and sports footwear at the mid-level price range. Office’s selection of footwear comprises both third-party brands and its own brands, it currently operates from 150 sites.
Truworths has more than 650 stores in South Africa and 40 in the rest of Africa. It forms part of Truworths International, an investment holding whose brands incorporate Identity, YDE and Uzzi.
The listed company cautions, however, that no binding offer has been made, nor has any transaction been concluded with Office or its shareholders. It says shareholders should be cautious when trading stock.
In the 52 weeks to June, the company - which has bought children’s clothing companies recently - reported net income up 2.6 percent to R2.47 billion as retail sales increased 12 percent in the second half of the financial year.
In the first half, retail sales gained 5.2 percent.
Truworths noted at the time that that the credit environment is steadily improving, despite the current tough economic environment. It said it was “optimistic” its merchandise ranges for the summer season was appealing to customers.
Retail sales (excluding its recent purchases of Earthchild and Naartjie) for the first seven weeks of the 2016 financial showed a gain of 15 percent year-on-year.
“This increase has been underpinned by very good sales growth on current season merchandise with gross profit increasing 18 percent, whilst markdowns on prior season merchandise have decreased by 0.2 percent over the corresponding seven-week period,” it said in its results.
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