Truworths Profit Little Changed as Customer Growth Stalls

Truworths International Ltd., South Africa’s biggest listed clothing chain, said first-half profit was little changed as its ability to add new credit customers was restricted by a tightening of lending criteria.

Net income was 1.4 billion rand ($126 million) in the 26 weeks ended Dec. 29, as sales rose 8 percent to 6.3 billion rand, the Cape Town-based owner of brands including Uzzi and Daniel Hechter said today in a statement. Credit sales accounted for 71 percent of total revenue.

“The continuing tough credit environment and the group’s restrictive credit granting criteria have limited new account growth,” the company said. About 74 percent of new account applications in the period were rejected, it said.

Customers buying on credit rose by 1 percent to more than 2.6 million accounts, Truworths said. The shares gained 0.5 percent to 68 rand as of the market close in Johannesburg, having declined 11 percent this year.

South African retail sales growth weakened in December as rising unemployment and inflation curbed demand. Truworths expects trading to “remain challenging” in the second half, it said. Retail sales for the first seven weeks of the second half rose 8.1 percent.