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Truworths to close around half of British shoe chain Office's stores

Fri, 4th Sep 2020 17:43

JOHANNESBURG, Sept 4 (Reuters) - South Africa's Truworths
International Ltd plans to close about 58 of its
loss-making Office shoe stores in Britain, its CEO said on
Friday, with an overhaul of the remainder of the retailer
expected to boost sales and margins.

The COVID-19 pandemic has had a major impact on the Office
business, already battling tough conditions due to Brexit
transition and low consumer spend.

The latest pressures forced Truworths to undergo another
extensive review of the business, which has 129 stores, with
competitors swarming in with offers, it said.

In the end Truworths decided to keep Office and offer it
funding of 6.5 million pounds ($8.57 million) in the form of a
secured revolving credit facility.

"In the restructuring process of Office, we really had a
good look at it and it became very clear to us ... that you know
Office has its challenges but let's look and make sure that we
don't overreact to this crisis," Truworths CEO Michael Mark, who
is retiring in two years after 31 years at the helm, told
analysts.

About 28 stores are planned for closure during Truworths'
2021 financial year as leases expire, while a further 30 will be
closed during the 2022 to 2024 financial years, Mark said.

Management is also hoping in the next two to three years to
grow its private label shoe brands, which have shrunk to about
10% of overall brands at Office in order to improve gross profit
margins as those brands are high in margin.

In South Africa, it will launch a new brand under its Uzzi
menswear brand and standalone stores as well as expand ranges of
its Identity and Hey Betty clothing brands over the next 6-9
months.

It also plans to launch e-commerce stores for Identity and
for its new kids concept store, which combines its LTD Kids,
Naartjie and Earthchild clothing brands in order to capitalise
on the expansion of online shopping in South Africa.
($1 = 0.7584 pounds)
(Reporting by Nqobile Dludla, editing by Louise Heavens)

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