TRUWORTHS
© TRUWORTHS
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2017 The First Of The
Next 100 For Truworths
PRODUCTION: David Napier
In the year of its 100-year anniversary, Truworths is remembering what has made it one of South Africa’s greatest fashion businesses while looking to the future and planning for success in its next century.
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South Africa’s Truworths has been a constant in the ever-changing apparel retail market for 100 years. Selling fashion items under a number of different brands, the Cape Townbased company has endured through economic, social and political change in South Africa, delighting customers with a high-quality, well-priced, thoroughly researched product offering. Planning for the future, Truworths has developed a business philosophy which will see it better serve its target market of the ‘youthful fashionable South African’. Truworths
aims to “entice them into the most exciting, visually appealing real and virtual retail environments where they can shop effortlessly for an innovative and adventurous blend of colour, fabric, quality, fashion styling and value and of international standard”. After being launched in 1917 in Cape Town as The Alliance Trading Company, the business was named Truworths Fashion House in 1935. Over the next 45 years, the business displayed impressive growth and created a national footprint before investing into new brands and international expansion. Today,
Truworths has more than 600 stores in South Africa and more than 40 across the rest of the continent; it has a presence in international markets, including London; and it is recognised by Brand Finance Africa as one of the top 30 most valuable brands in the country. The company is listed on the stock exchange and employs an estimated 11,000 people – this is truly a South African fashion institution. But times are tough for retailers; uncertainty in markets stemming from the 2008 GFC, and a lack of confidence in SA following the economic downgrades and period of
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INDUSTRY FOCUS: RETAIL
//I DO THINK OVER THE NEXT 10 YEARS TRUWORTHS INTERNATIONAL WILL BECOME MUCH LARGER IN AFRICA// technical recession has resulted in a tight industry, where many players vie for market share. Just last month, the JSE reported weaker sales figures with apparel retailers making slight losses in the markets. Some analysts have questioned the company’s ability to remain relevant with the youth of today, some have suggested that Truworths reliability on credit sales could be an issue, and some asked if Truworths has the ability to compete with global fast fashion competitors such as H&M and Cotton On. But CEO Michael Mark is bullish about the future, citing opportunities in Africa in particular as chances for the company to expand its presence. “I do think over the next 10 years
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Truworths International will become much larger in Africa. “Despite the difficulties we are all having in Africa, I do think that eventually, when the time is right and the opportunity presents itself, we will acquire more businesses that are bolt-on or match our own,” he told Business Live. GOOD LOOKING RESULTS Truworths brands include Earthaddict, LTD, Identity, Daniel Hechter, Inwear, Ginger Mary, Zeta, UZZI, Naartjie, Earthchild, and Office. Through these brands, Truworths managed to post reasonably strong results for the period ending June 2017. Despite negative feeling in the industry and pessimism from
market commentators, the company posted an increase in group retail sales of 8.6%, 8.3% growth in cash generated from operations (to R3 billion), and 8.3% growth in net asset value per share. Across the Group, all published financial targets were achieved, world-class e-commerce operations were implemented, and exciting new loyalty programmes were rolled out. Truworths also acquired home interiors business Loads of Living allowing the company to access new markets, and it stated that global economic prospects are improving, making for an optimistic outlook for the business. “Goldman Sachs expects global economic growth to accelerate, with world GDP expanding at a pace slightly faster than in 2016 but with risks to the downside. “The UK economy has been more resilient than expected following the Brexit referendum, with 2% above
TRUWORTHS
GDP growth in H2 2016 and only a moderate slowdown year to date,” the company stated. “Retail sales exceeded R18 billion and operating profit reached R4.2 billion, with operating metrics among the highest of fashion retail companies worldwide,” it added. South Africa officially exited a period of technical recession following growth of 2.5% in 2017’s second quarter. With Mark citing pressure on consumer spending in the recessionary environment as one of the main drawbacks for the business in the last financial year, Truworths will welcome the news that the economy is set to recover. Now that the acquisition of Office is complete, and that business has been fully integrated, the prospects for growing a mass online offering are exciting. 100 YEARS AND YEAR 001 Key in the marketing strategy of Truworths surrounding its 100-year anniversary is the delivery of the message that the business is proud of its past but is firmly looking towards the future. The business is keen to point out that 2017 is the 100th anniversary, it is also the first year of the next 100. The official video advertisement released by Truworths states: “100 years of fashion - we love fashion more than ever but fashion isn’t about now, it’s about tomorrow, so we’re celebrating what we want to become. The next 100 years of fashion; it starts now.” This ambitious, forward thinking mind-set has contributed to the company’s award-winning strategy. This year, Truworths has picked up recognition in a number of competitions including the Sunday Times Generation Next Awards Coolest South African Fashion Brand 2017 where Identity came in first place, UZZI came in second place,
and LTD came in fourth place. In the category of Coolest Clothing Store 2017, Identity came in at seventh place and Truworths came in eighth place. These follow on from a number of awards collected over the past few years, including the notable recognition from EY in its Excellence in Integrated Reporting Awards 2016. Talking about its future ambitions, the company states: “2017 is even more significant as it also marks the first of our next 100 years. As a high fashion retailer, we always look to the seasons ahead, to identify the latest international style trends that will continue to set up apart and ensure Truworths remains synonymous with high quality fashion, aspirational brands and unrivalled service.” This South African giant of the
fashion world looks set for a bright future. While times have been tough, and a constantly changing market has made for challenging times, Truworths has always sustained and always delivered for its customers, and that is the most important aspect in business growth. Here’s to the next 100 years.
TRUWORTHS +27 21 460 2300 services@truworths.co.za www.truworths.co.za
Powerful Data. Intelligent Insights.
Congratulations to Truworths on
100
years in business www.compuscan.co.za
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Issue No.63
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OCTOBER 2017