Newsletter No 8/7 March 2025
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Woolworths CEO upbeat clothing unit will cover itself in long-term success
By Tiisetso Motsoeneng and Jacqueline Mackenzie
Woolworths CEO Roy Bagattini. Picture: Supplied
The food division delivers a strong performance with Woolies Dash reporting sales growth of 49.2%
Woolworths CEO Roy Bagattini stood firm in his belief that the clothing unit is on course to deliver higher returns, saying the half-year’s underperformance was a temporary blip stemming from a sweeping overhaul of the division’s supply chain.
Bagattini was speaking to Business Day shortly after the high-end retailer issued its financial results, which showed it had suffered a drop in the apparel division at home and Australia overshadowed a strong showing for its food division.
“We actually had a real problem, a real challenge in our distribution centre, which is self-inflicted because we’re changing how we manage inventory and flow the inventory into the stores,” said Bagattini.
“That created a very specific problem for us but that’s being resolved, so we’re back on track now and we’re starting to build momentum. I do feel quite confident, actually, about the delivery of our margin here in the fashion division.”
Since he took the helm at the R50bn-plus company, Bagattini has been preoccupied with the food and beauty division, seeking to turn it around and reposition it to appeal to a younger and more diverse customer base.
He has closed unprofitable stores, lifted the proportion of products that leave the stores at full price from at least 40% to 80%, rather than being marked down.
But the strategy came under a sharper focus in the latest financial results after sales hardly grew in the six months to end-December, offsetting a robust showing from the food division.
The weak performance of apparel juxtaposed with the thriving food division is likely to reignite debate about the logic of spinning off the apparel division and opening it up to investors who are only interested in getting exposure to one of the country’s most highly rated food businesses.
Still, Bagattini is confident that the apparel business remained an integral part of Woolworths, pointing to the more than doubling in profit margins, or the proportion of revenue that remains after paying expenses — to about 14% in the latest earnings report.
“Some would love to say, ‘why do you have to have that business? Why don’t you just have the food business?’ but they wouldn’t ask that question [if] the fashion business performs, and I think the fashion business will perform,” he said.
Woolworths has pumped R1.5bn into the value chain — a network of back-end activities such as sourcing, distribution and retailing — to replace an outdated, rigid one that allocated and shipped products to stores based on forecasts rather than actual demand. The new hi-tech system promises to pull products to the stores based on real-time demand.
“We have a very clear plan. Our challenge is getting our product into our stores consistently, and that’s why we’re making this investment behind the operating model to give us the wherewithal,” he said.
“Our old systems were very constraining and hampered us significantly. But historically, we never invested in this business, we’re now investing in this business to build that capability, and that is what will make the difference going forward.”
Woolworths, which vies with Shoprite, Pick n Pay, Spar and Massmart, reported a 25% drop to 152.8c in headline earnings per share, which flowed from R40.3bn in turnover that rose by 5.7%.
An interim dividend of 107c per share was declared, 27.7% lower than a year ago.
The group’s food business delivered turnover and concession sales growth of 11.4% and 7.3% on a comparable-store basis. Excluding Absolute Pets, which was acquired in the fourth quarter of the previous financial year, food sales increased by 9%, supported by continued market share gains.
Online sales
Woolies Dash, its on-demand offering, delivered sales growth of 49.2% for the period, with total online sales increasing by 37.2% and contributing 6.4% of food sales.
After the sale of David Jones in 2023 and the successful separation of CRG from David Jones in 2024, CRG is undergoing a significant restructure to reconfigure its operating model and reset its structural economics as a stand-alone business. This restructuring is being implemented in an accelerated time frame.
The apparel trading environment in Australia and New Zealand remains significantly constrained, characterised by reduced footfall and spend, and intense promotional activity.
Within this context, sales declined by 6.2% for the period and by 7.8% on a comparable-store basis.
Despite signs of improving consumer confidence in SA and Australia, recent positions taken by the US regarding global trade relations had elevated the forecast risk regarding the macroeconomic outlook for the current year, particularly in the case of SA, Woolworths said.
In Australia the retail sector was likely to remain highly promotional until the pressure of living costs eased.
During the second half, Woolworths would reassess the carrying value of the assets of its underperforming brands within the Country Road Group, it said. 
Truworths reports fall in profit on muted SA consumer spending
By Jacob Webster
Picture: Freddy Mavunda
Retailer expects discretionary spending in SA to remain subdued in the coming months
Amid ongoing global economic uncertainty, SA’s consumer spending is likely to remain subdued in the coming months, says retail group Truworths International in its latest interim results.
The group reported an increase in retail sales of 2.4% year on year to R12.5bn.
As the group’s e-commerce offering continued to gain traction in the African market, Truworths Africa recorded a 4.6% rise in retail sales. Online sales were up 38%, contributing 5.8% of the division’s sales.
The retailer said it expected discretionary spending in SA to remain muted in the coming months as “volatility and uncertainty in global economies remain a risk to the stability of the local economy and currency”.
In November, when it reported sales for the first 18 weeks of the financial year, Truworths said trading conditions in SA remained challenging.
The group said in its latest annual report that competition from Shein and Temu — the online value clothing retailers based in China that sell directly to consumers in SA — with increasing competition from online and traditional retailers were the biggest risks facing the business.
Lower inflation and further expected interest rate cuts were, however, expected to support consumer spending in the UK, it said.
Office UK
Office UK, the group’s retail brand which manages 86 stores across the UK and in Ireland, was central to Truworths’ improved performance during the period under review, with retail sales from this segment up 13.3% from the previous comparable period.
The UK business’ strong trading performance was attributed to its store modernisation and expansion programme, as well as its established e-commerce platform. Online sales from Office UK rose 7%, comprising 45% of the business’ total retail sales.
In the first half Truworths expanded its trading space to 898 stores. Truworths Africa opened 23 new stores and closed 15, while Office UK opened six and closed four.
The retailer expects its trading space to increase 1% by the end of the financial year, with Office UK set to grow its trading space 10%.
Headline earnings per share were down 4.6% at 489.2c, while trading profit decreased 8.3% to R2bn. This was primarily driven by R41m in foreign exchange losses for Truworths Africa, with depreciation charges and higher employment costs due to minimum wage increases and operational expansion in the UK.
Despite the slip in profit, Truworths said that the company remained highly cash generative, with R3.3bn in cash generated from operations, which was used to fund R429m in capital expenditure and R756m in dividend payouts.
The group declared an interim dividend of 317c per share, down 4.5% from the previous comparable period.
Applications are open for the Durban Fashion Fair Class of 2025 Mentorship Programme
Source: unsplash.com
Applications for the Durban Fashion Fair (DFF) Class of 2025 Mentorship Programme are open until Thursday 20 March 2025.
Application requirements
To apply, aspiring designers must submit the following documents:
A short biography or business profile
A motivational letter
A storyboard or images of their latest collection
A residential letter from their ward councillor
Proof of qualifications
All applications must be delivered in person to the Business Support Offices, 7th Floor, Embassy Building, 199 Anton Lembede Street, Durban. Late submissions will not be accepted.
Programme objectives
The DFF Mentorship Programme provides mentorship, training, and exposure to help designers establish themselves in the industry. The programme focuses on:
Technical fashion skills – improving design and craftsmanship
Business development – learning strategies for brand growth
Market access and retail – connecting with potential markets
Networking opportunities – engaging with industry professionals
Role in Durban’s fashion industry
Councillor Thembo Ntuli, chairperson of the City’s Economic Development and Planning Committee, stated that the programme integrates business skills with technical expertise and supports employment in the local textile industry.
Part of a broader fashion development initiative
The mentorship programme is part of the eThekwini Municipality Fashion Development Programme, which provides emerging designers with market access through initiatives like the annual DFF showcase and the DFF Emporium.
HomeChoice International plc (Incorporated in the Republic of Mauritius)
Trading statement for the year ended 31 December 2024
In accordance with paragraph 3.4(b) of the JSE Limited Listings Requirements (“JSE LR”),
companies are required to publish a trading statement as soon as they are satisfied that a
reasonable degree of certainty exists that the financial results for the period (“current
period”) to be reported on will differ by at least 20% from those of the prior comparative
period (“prior period”).
Shareholders are accordingly advised that the basic earnings per share (“EPS”) for the
current period is expected to be between 376.1 cents and 407.4 cents, representing
between 20% and 30%, higher than the EPS of 313.4 reported for the prior period. Basic
headline earnings per share (“HEPS'”) for the current period is expected to be between
371.2 cents and 402.1 cents, representing between 20% and 30%, higher than the HEPS of
309.3 reported for the prior period.
The Group’s financial results for the twelve- months ended 31 December 2024 is expected
to be released on the Stock Exchange News Service on or about 11 March 2025.
The information contained in this announcement is presented in accordance with the JSE
LR and has not been audited, reviewed or reported on by the Group’s external auditors.
The handbag was first designed and used to help women attract husbands. Invented in the 19th century, women personally embroidered them with colorful and intricate patterns to show off to the men.
Christian Louboutin manufactured a limited edition for brides. They had baby blue soles to give the bride “something blue,” but the company ceased production after copyright issues.
The beret, which originated in France, is a popular fashion item and is also part of certain military uniforms.
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