Truworths shares tank on sales update
Fin24 - Nov 7th 2014, 11:32
Johannesburg - Clothing retailer Truworths [JSE:TRU] has issued a trading update on Thursday showing slowing sales growth, sending its shares down more than 8% in early trade.
Truworths, which also named the head of French retailer Kiabi as its new chief executive, said sales increased 4.7% to R3.7bn in the 18 weeks ended November 2, well below the 7% growth rate achieved in the same period last year.
Shares in the company dropped as much as 8.4% and by 10:07 were down 3.5% at R71.90, underperforming a 0.5% fall in the JSE All-Share index.
Once among the must-haves in fund managers' portfolios thanks to credit-fuelled spending in recent years, retailers have been among the worst performing stocks over the past 12 months as credit providers pull back due to rising defaults.
There are concerns spending could be further affected in the run-up to the vital Christmas holidays, with analysts seeing rising interest rates. The ratio of household debt to disposable income is already at around 75%.
Truworths sells about three quarters of its products via its own-store credit cards.
The company named Jean-Christophe Garbino as CEO to replace Michael Mark, who has been at helm for 23 years, with effect from March next year. Garbino has been CEO since 2007 of Kiabi, a budget friendly fashion retailer that runs 450 stores in eight countries across Europe and Russia.
Mark is expected to remain on the board after his retirement, Truworths said.From Fin24.com
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