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Fashion retailer Truworths grew market share in both women’s and men’s clothing, the firm said yesterday, quoting statistics from the Retail Liaison Committee, an industry body.

October 9, 2007

By Tom Robbins

Cape Town – Fashion retailer Truworths grew market share in both women’s and men’s clothing, the firm said yesterday, quoting statistics from the Retail Liaison Committee, an industry body.

Chief executive Michael Mark said the company’s share of the women’s clothing market had risen from 17 percent to 19 percent in the year to June, while the men’s category had grown from 14.5 percent to 16.5 percent.

As fashion retailers with high margins, Truworths and Foschini take big risks on styles, and missing the market’s taste for a season can hurt sales harder than at retail chains such as Edgars, which competes more on price.

In the year to June, Truworths lifted sales 27 percent to R4.9 billion, while in the year to March, bigger rival Foschini’s sales were up 12.4 percent to R7.2 billion.

Abri du Plessis, the chief investment officer at Gryphon Asset Management, said while not all market share information was reliable, he believed Truworths had grown market share.

Du Plessis believed this had been the case at the core Truworths chain, and did not simply reflect the R37 million Uzzi acquisition included in the full-year results for the first time.

Mark said it was likely that Truworths would buy the 49 percent it did not already own in Uzzi, and was on the lookout for other acquisitions.

Du Plessis said these were likely to be small, privately owned chains that played in a similar fashion space, but it was possible that it could buy a chain for its store locations and convert them to existing brands.

Commenting on international competition, Mark said there was a growing expectation that large foreign retailers would shortly enter the local market. But they would open a few flagship stores rather than pose a nationwide threat to the company’s stores.

Last week Ishwar Chugani, the executive director of Dubai-based leisurewear retailer Giordano Fashions, said South Africa was on its radar screen and he would “like to be here in 12 to 15 months”.Giordano operates 1 900 stores in the Middle East and Eastern Europe, but like many foreign clothing retailers, has concentrated new investments on the growing and relatively unexploited former communist bloc European countries.

Truworths expected profits to continue growing next year, but warned this would be at a slower rate than this year’s 33 percent growth in headline earnings a share.

Truworths shares lost 1.55 percent to R35 yesterday. The general retailers sector gained 0.18percent.