S.Africa's Woolworths turns to casual wear in COVID crisis as profits rise
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
JOHANNESBURG - South African retailer Woolworths said on Thursday it was expanding its casual and sports leisure wear ranges to reduce reliance on formal wear, after posting its first rise in profits for the six-month period ending in December since 2015.
The move aims to tap higher dema
nd for casuals and sportswear from consumers who are spending less on formal clothes as the coronavirus crisis has accelerated a shift to working from home.
Clothes retailers have recently struggled to keep up with the change in consumer preference as they battle a drop in footfalls in malls and shopping centres.
Woolworths, which also operates in Australia and New Zealand, announced in September a strategic review of its fashion business in South Africa, which the firm says has been plagued by poor execution in its fashion ranges and lacked customer focus.
The fashion, beauty and homeware business in South Africa, where it makes 62% of its revenues, booked a 11.2% decline in sales in the 26 weeks to Dec. 27, hit by a significant decrease in Black Friday spending and the reduction in formal wear trade.
It is exiting from Studio.W and WCollection clothing ranges, it said in a brief presentation posted on its website.
Food sales rose 10.9% in South Africa, continuing to show positive momentum with volume growth and market share gains despite a ban on alcohol sales in July and December.
In Australia and New Zealand, sales at David Jones, the upmarket department chain, and Country Road Group were hit by a lockdown in the State of Victoria and lower footfall.
This was partially offset by government relief packages, rent relief from landlords and further growth in online sales.
Overall group turnover and concession sales rose by 5.3% in the first half, recovering from a 4% decline in the second half of its financial year to June 28.
The retailer said headline earnings per share (HEPS), the main gauge of profit in South Africa, surged by 58.3% to 261.1 cents. Adjusted diluted HEPS, which strips out certain items, rose by 19.4%.
Woolworths last posted a profit increase for six month period ending in December in 2015.
($1 = 14.4760 rand)
