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Harare - With the Zimbabwean government now predicting a 3.7% GDP growth rate in 2017, the story is completely different at one of the country’s leading clothing retailers, Truworths.
ZSE-listed Truworths, owned 34.39% by Truworths International [JSE:TRU], on Friday reported a 35.89% drop in revenue for the half-year ended January 8 2017.
In a statement accompanying the results, CEO Bekithemba Ndebele said group merchandise sales of $6.5m for the 26 weeks to January 8 2017 were 40.8% lower than those of the comparative prior year.
The group reported a loss of $986 888 for the period, against a profit of $327 876 prior year comparative.
The decline in sales was across all its chains with sales in Truworths coming off by 40.3%, Topics by 43% and Number 1 by 31.7%.
“The gross profit margin decreased to 38.1% (2016: 46.3%) as product was discounted to stimulate sales in a market witnessing general low aggregate demand,” said Ndebele.
Going forward, Ndebele said trading conditions are expected to remain extremely difficult and the business will have to reduce trading space in line with trading densities.
“The shortage of foreign currency will negatively impact product availability and pricing,” he said, adding that the decline in aggregate demand and gross margins will remain under pressure.
