Truworths: more belt tightening

Johannesburg - South Africa's biggest clothing retailer Truworths International Ltd posted a rise in sales on Thursday, but said trading conditions would remain tough in 2010 as consumers reign in spending.

Truworths said group retail sales in the 18 weeks from June 29 to November 1 rose 10% to R2.3bn, while comparable (same store) retail sales grew by 2%.

"On the clothing side they are amazing when it comes to reading fashion trends. It tells you in a very difficult economic environment they are still getting it all right," said Abri Du Plessis, a retail analyst at Gryphon Asset Management.

"It's a good result in current circumstances... I think Truworths are definitely taking some market share from Woolies (Woolworths)."

Truworths, which rivals Foschini, Woolworths and unlisted Edcon, said it increased trading space by 9%, while its debtor's book (showing its credit to retail customers) inched up 11% to R2.6bn.

Foschini, which is expected to report interim results later on Thursday, was trading down 2% at R57.50.

It posted an 8% rise in sales for the first five months of its fiscal year in September, and Du Plessis said he expected headline earnings per share to be about 9% up.

South African retailers have struggled to keep sales rising as the recession in Africa's biggest economy has hit consumer spending and threatened job losses.

However, the country's central bank has reduced interest rates by 500 basis points since December, which is likely to help ease pressure on consumers.

- Reuters