South African retailer Truworths International Ltd is negotiating fresh funding for its British footwear business Office as part of measures to secure the unit’s viability, the company said recently. “The economic crisis caused by the severe negative impact of the ongoing COVID-19 pandemic has resulted in diminished revenue, reduced collections and an increase in the doubtful debt provision in respect of the Truworths Africa debtors’ book,” the group said in a statement.
The group sells clothes, jewellery, shoes and homeware. Doubtful debts are those that a business or individual is unlikely to be able to collect from shoppers who buy on credit.South African retailer Truworths International is negotiating fresh funding for its UK footwear business Office as part of measures to secure the unit's viability, the company said. The economic crisis caused by the 'severe negative' impact of the COVID-19 pandemic has led to diminished revenue, reduced collections and a rise in doubtful debts, it said.#
The group is negotiating funds as well as implementing redundancies and renegotiating store leases to secure Office’s ‘long-term viability’, according to British media reports. Truworths bought a majority stake in Office in 2015.
Problems in Office have been compounded by uncertainty over the United Kingdom’s departure from the European Union (EU) and by the collapse of department store House of Fraser, where Office had several concession stores.
In August, its chief executive Michael Mark told analysts the company expects to close up to 15 of Office’s roughly 139 stores in the next two years, with possibly more to follow, and also close three concessions. In May, Truworths said it would have to take an impairment related to Office, but declined to quantify the value.
Truworths this week said group retail sales declined by 9.4 per cent to 16.9 billion rand (£809.8 million) in the 52-weeks ended June 28 because of lockdowns in South Africa and the United Kingdom. Retail sales for Office fell by 11.3 per cent in local currency.
Sales for Truworths Africa business, which includes EARTHCHILD kids clothing chain and Identity clothes store, decreased by 8.7 per cent, with credit and cash sales falling by 8.4 per cent and 9.5 per cent respectively.
Fibre2Fashion News Desk (DS)
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