Truworths slumps to $7.2 mln loss in H1,2021

Harare, 2021 (New Ziana) – Clothing retailer, Truworths suffered a $7.2 million inflation adjusted loss for the half-year ending January 2021 as Covid-19 lockdowns hit on sales.

During the same period in 2020, the company recorded a $30.9 million profit.

Revenue was down to $138 million as sales declined 23.3 percent during the period under review.

“Units sold in the half-year were 23.3 percent down on the prior year and this was the trend from July to December on a month by month basis compared to the similar months last year,” the company said.

“Overall the half-year was negatively affected by the Covid-19 business restrictions in particular the period July to September. The most negatively impacted area on trading volumes in the half year under review was Harare CBD (central business district) which happens to have our biggest stores.”

Zimbabwe was under a Covid-19 lockdown from March 2020 to March 2021 as government tried to curtail the spread of the pandemic which has infected nearly 40 000 people and killed almost 1 600 in over a year.

Businesses deemed non-essential were closed as government restricted movement and economic activity.

Truworths said due to high inflation, the business had to curtail credit sales.

“In the half year cash sales were 66.9 percent of total sales and credit sales were 33.1 percent of total sales,” the company said.

Inflation also saw trading expenses surge 539 percent as rentals and employment costs went up.

The firm opted not to declare a dividend “due to the need to finance increased working capital requirements in a hyperinflationary environment with limited/ reduced supplier credit terms.”

Truworths lauded the foreign exchange auction system for availing funds to import fabric.

In the outlook, the company said business would likely improve on condition there are no further lockdowns.

“Should there be no further lockdowns and with improved cereal production in the macro-economy, we expect the business to continue in its positive trajectory as experienced in the months of March and
April albeit from a low base last year which was adversely affected by the lockdowns in the months of April 2020 and May 2020,” the company said.
New Ziana