Group Strategy

Truworths International aims to be a world-class omni-channel retailer of fashion clothing, footwear, accessories and homeware, operating in both the southern and northern hemispheres.

The strategy is aimed at ensuring a diversified mass market customer base in both developed and emerging market countries. The successful implementation of this strategy should result in a diversified earnings profile, improved returns for shareholders, and more value being created for other stakeholders.

Sound financial and capital management, information technology, human capital and operating systems support the strategy, while the business philosophies of the Group’s operating segments guide all business practices and interactions with stakeholders.

The Group’s strategy has been consistently applied during the reporting period and the directors confirm that the strategy remains appropriate and is unchanged for the year ahead.

Medium-term strategic plans

Medium-term strategic plans are developed by the board and management to enable the Group to deliver its long-term strategy.

These plans are determined in relation to the Group’s business model, vision and purpose, material issues and the related risks and opportunities, macroeconomic conditions and competitive forces. The plans are reviewed and amended annually.


Medium-term strategic plans	Truworths and Office integration and collaboration	Strategic acquisitions
Delivering against our strategic plans in 2018	Office London footwear chain launched in SA Further refined the merchandise planning system implemented in Office to improve stock management Commenced integration of financial systems to enhance financial reporting Collaboration undertaken with Office to develop clear brand identities and differentiators for in-house brands Truworths benefited from Office’s knowledge and experience in sports footwear and e-commerce	Acquired Loads of Living chain to diversify the Group’s product offering and accelerate entry into the homeware market Loads of Living integrated into the Group’s systems and operations, and a new distribution centre established Ongoing review of acquisition opportunities undertaken to complement the Group’s fashion offering in SA and UK
Medium-term strategic plans	Truworths and Office integration and collaboration	Strategic acquisitions
Plans and priorities for 2019	Continue to collaborate on systems development, merchandising, business intelligence and measurement processes	Evaluate the potential acquisition of fashion-related businesses to further diversify the Group’s product offering and earnings base


Medium-term strategic plans	Account activities and portfolio optimisation	Omni-channel retailing capability	Product procurement and supply chain management	Strategically aligned diversification
Delivering against our strategic plans in 2018	New account applications exceeded 2 million for the first time Active account base grew by 2% to 2.6 million Increase in shoppable accounts from 82% to 84% of the active customer base 3% decline in debtors book balance Improved collections, lower bad debts and lower doubtful debt provision Commenced a project to improve new account decision-making, limit increases and authorisations Completed roll-out of new hosted contact centre for collections Successfully piloted lay-bys in selected stores	E-commerce platform launched with new Truworths website going live in February 2018 Turnover generated to date by e-commerce platform equivalent to a mid-sized Truworths store Continued development of Office London and cosmetics/fragrances websites for launch in first half of 2019 financial period Increased non-account loyalty customer base to 3.6 million	Reduced level of markdowns despite tougher sales environment Continued consolidation of fabric sourcing and manufacturing to improve value for customers Grew local procurement to shorten lead times Grew quick response model to reduce lead times to only four weeks	Expanded presence in footwear market through opening of Office London in SA with 13 stores at period-end Opened 14 Kids Emporiums, bringing total to 46 New design for Kids Emporium stand-alone stores introduced and two stores opened Acquired Loads of Living
Medium-term strategic plans	Account activities and portfolio optimisation	Omni-channel retailing capability	Product procurement and supply chain management	Strategically aligned diversification
Plans and priorities for 2019	Improve new accounts decision management process Continue implementation of omni-channel communication across all areas of account and loyalty communication Redevelop and test new account limit management strategies Integrate e-commerce sales into single view of the customer to grow profit across both bricks and mortar and online businesses Lay-by facility to be extended to all stores before 2018 festive trading season	Office London and YDE websites to launch in second quarter of 2018 Cosmetics and fragrances to be added to e-commerce offering ahead of 2018 festive season trading Fashion Finder to launch in early 2019 to deliver a broader omni-channel experience Loads of Living to be e-commerce-enabled by 2019 period-end Commence development of new Identity website	Continue to focus on fast fashion and quick response merchandise procurement strategies Offer better value to customers through continued focus on strategic fabric purchasing and supplier consolidation Newly developed supplier scorecard to be implemented	Refine Loads of Living product offering and test new store concept Continue to expand Office London store footprint in SA ‘Context’, an experiential concept store, planned to launch with the opening of two stores in the second half of the 2019 financial period, that will offer sophisticated designer ladies fashion, fragrance and cosmetic beauty brands as well as homeware


Medium-term strategic plans	Business philosophy and DNA	Marketing, customer engagement and loyalty	Product and planning	Expansion and growth strategy	E-commerce
Delivering against our strategic plans in 2018	Updated business philosophy communicated across the business and now incorporated into annual staff assessments	Selected omni-channel gateway provider that will enable the capture of consistent customer information across stores, online and customer service to develop more consistent, personal and relevant communication Developed new online life cycle marketing programmes to increase customer retention Developed new mobile app Extensive programme of General Data Protection Regulation (GDPR) compliance across data capture, storing and sharing processes Increased use of social media to increase customer awareness and engagement, allowing shoppable content on Instagram	Maintained supplier relationships through ongoing engagement and collaboration Implemented various initiatives to address slow-moving stock and previously marked down stock, including: reduced buffers on final stock for specific product lines; and targeted markdown events tailored to specific stores for seasonal product Initiated review of efficiencies across warehouse and distribution network Designed enhancements to planning process that will allow greater visibility over total supplier commitment	Store design concept further refined after initial introduction at Arndale Manchester, Oxford and Bracknell stores A new ‘store of the future’ concept is being developed with initial implementation planned for 2019 Growth in wholesale sales and expanded customer base Improved geo-location technology to help customers find their nearest store more easily	E-commerce accounts for 31% of retail sales (2017: 28%) Various initiatives launched to enhance the customer online experience, including store lookup and multi-currency payment options Expansion of ‘ship from store’ programme Continued growth in online footprint through third-party websites
Medium-term strategic plans		Marketing, customer engagement and loyalty	Product and planning	Expansion and growth strategy	E-commerce
Plans and priorities for 2019		Build customer understanding across stores, digital and customer services to develop more consistent, personal and relevant communication Develop customer-centric, loyalty-based marketing programme to drive new and repeat purchases and incremental sales Roll out omni-channel gateway provider across all sales channels Improve in-store technology to enhance customer experience	Define and document buying processes clearly to ensure new processes are streamlined Complete warehouse and distribution network review and develop action plans to address outcomes Optimise management of slow-moving stock Enhance ability to optimise target stock levels through the planning tool	Continued expansion of wholesale business Further enhance store estate with digital technology to improve operational efficiency, particularly around stock search, click & collect, web returns and queuing ‘Store of the future’ concept implementation planned for 2019 Implement new payment gateway to enhance cross-channel loyalty	Continued growth of e-commerce through improved fulfilment capability and customer experience Consider e-commerce expansion through use of local language sites Offer new international payment options