Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Truworths Slides Most in Four Years as Sales Growth Slows

Nov. 7 (Bloomberg) -- Truworths International Ltd., South Africa’s largest listed clothing retailer, fell the most in more than four years as inflation curbed consumer spending and slowed its sales growth.

The stock slid 8.1 percent to 85 rand by the 5 p.m. close in Johannesburg, the biggest decline since November 2008. Truworths was the worst performer on the 11-company FTSE/JSE Africa General Retailers Index today.

South African consumer confidence reached a 10-year low in the three months through September as inflationary pressures curbed spending and demand for credit. Truworths sales for the 18 weeks through Nov. 3 rose 7 percent to 3.5 billion rand ($341 million), compared with a 15.9 percent increase a year earlier, the Cape Town-based company said today in a statement. Credit sales accounted for 71 percent of revenue, with like-for-like store sales rising 2 percent.

“It’s becoming increasingly difficult for credit retailers,” Roger Tejwani, a retail analyst at NOAH Capital Markets, who has a sell recommendation on Truworths, said by phone from Cape Town. “Their debtor costs have grown and they are facing increasing competition from international brands.”

Foschini Group Ltd., South Africa’s worst performing clothing retail stock this year, which sells about 60 percent on credit, fell 3.5 percent to 108.11 rand. Retail sales in the six months through September rose 9 percent to 6.7 billion rand rand, Foschini said in a statement today.

“The difficult credit environment is unlikely to improve in the second half of the year due to the high level of consumer indebtedness,” it said.

Truworths shares have dropped 22 percent this year, while Foschini has declined 23 percent. The FTSE/JSE Africa All-Share Index has rallied 17 percent.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.