Truworths fall on hard times

Clothing retailer - Truworths suffered a 18,6% decline in sales but experienced a 3,6% increases in account holders projecting a very difficult trading year.

The group said merchandise sales for the seven weeks from January 2015 to February are up 19,7% on similar period last year.

"Group retail sales decreased by 18,6% to $10,8 million for the 27 week period ending 11 January 2015 compared to 26 weeks ending 05 January 2014," the group announced in its financial statement.

Sales value decreased to 16,8% for Truworths, Topics (16,9%) and Number 1 reported a 28,95 drop representing an 18,6% decline.

"The gross margin decreased from 51,7% in the prior period to 48,5% as a result of the introduction of the Homeware range which carries a lower margin. Trading expenses decreased by 11,0%. The operating margin decreased to 0.7% from 10,1% in the prior period".

The group said the number of active accounts increased by 3,6% over the comparative period to 7,112 of these had signed up for the Instore Credit Card at period end compared to 4, 371 in the comparative period.

Net bad debt as a percentage of trade receivables was 2,6% compared to 5,1% in the prior period mainly as a result of a significant increase in recoveries.