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Our Business Philosophy has continued to drive our decision-making throughout the COVID-19 pandemic. We are convinced that adherence to the Philosophy enabled the Group to successfully deal with the many challenges faced, to implement mitigation strategies and pursue opportunities to grow and prosper during the COVID-19 pandemic.

In one of the most difficult periods faced by the world in the modern era, the Group nevertheless managed to maintain dividend payment, generate increased returns and buy back 19.3 million shares. This successful navigation through the pandemic is due to the adherence to and implementation of the Business Philosophy by the dedicated directors, management and thousands of employees throughout the Group.

While there were no hard lockdowns in South Africa during the reporting period, various levels of lockdown restrictions adversely impacted economic growth, employment, consumer confidence and spending, as well as retail foot traffic during the second and third waves of infection.

Management was steadfast

In the UK, trading conditions were exceptionally challenging in the aftermath of Brexit and the closure of Office stores for 18 weeks as all non-essential retail activity was suspended by the government. Lockdown restrictions in the UK were gradually relaxed in the last quarter of the current period as the government’s vaccine programme gained momentum.

Group retail sales increased by 0.5% to R17.0 billion. Retail sales in Truworths grew by 5.5% to R13.0 billion. Office retail sales declined by 17.4% to £192 million owing to the prolonged store closures and a reduction in the store footprint. Online trading continued throughout the lockdowns and Office benefited from its strong e-commerce presence, increasing online sales by 18%, contributing approximately 63% of the segment’s retail sales for the year compared to 44% in the prior period.

Operating profit increased 23.5% to R3.0 billion supported by efficient inventory and margin management, tight expense control and a significant decrease in debtors costs as the debtors book showed a stronger and more rapid recovery than expected.

Aspirational fashion

Our Business Philosophy ensures that we maintain our unique positioning as the aspirational better-end mainstream retailer. We believe our differentiation has been strengthened in recent times as many of our competitors have changed direction by offering more lower-priced and often more casual product.

Our market-leading, aspirational fashion brands cover a broad range of fashion lifestyle needs and we have continued to expand the brand portfolio to increase customer appeal and identify additional lifestyles where we believe there is opportunity. Fuel, a young menswear fashion brand with a streetwear edge, was launched in April and we developed Loads for Kids, a range of kids bedding and décor accessories, for launch early in the 2022 financial period.

We launched Primark which marked the Group’s entry into the value segment of the fashion market. The brand targets young men and women with quality fashion at excellent prices. Eleven stores were opened by year-end.

Store strategy

Truworths’ store strategy supports our aspirational positioning, with the emporium store concept being the pinnacle in terms of an aspirational shopping experience for customers. Within the Emporium store, customers can browse across multiple brands of unique and distinctive colour, quality and fashion styling, complemented by an accessory, beauty and homeware range for all occasions.

Truworths aims to trade from the best positions in fashion courts of shopping malls and to be recognised as the fashion anchor tenant. Store concepts and designs are constantly updated in line with international trends and we have recently introduced new concepts including the Identity Superstore, Kids Emporium, Loads of Living within the Truworths Emporium as well as a new Truworths Emporium concept.

We continued to follow our strategy of cautiously managing trading space and introducing new fashion brands. We are also focused on improving the efficiency and productivity of our real estate portfolio by consolidating stores, rationalising trading space and closing under-performing stores.

In the past year Truworths opened 26 stores and closed 27, with the retail footprint now comprising 758 stores in South Africa and 35 in the rest of Africa. Trading space is planned to remain unchanged for the 2022 financial year.

Expanding e-commerce

Online sales accounted for 16% of the Group’s retail sales, increasing by 30% over last year. Office again performed well off an established base to grow online sales by 18% to £121 million. Truworths e-commerce sales have more than doubled in the past year, growing by 127% to R260 million, and is now larger than the top bricks-and-mortar store. E‑commerce contributed 2.0% of retail sales at Truworths compared to 0.9% in the prior period. Over 800 000 units of merchandise were purchased on our online platform, with 66% of the orders delivered via ‘click & collect’ in-store and the remainder directly to customers.

The Truworths e‑commerce business is highly profitable and achieved a gross margin of 49%, with the net margin comparable to a highly profitable store.

Identity e-commerce was launched early in the 2022 financial year.

Management was steadfast

Account management

The Truworths debtors portfolio showed a stronger-than-expected recovery by June 2021, with certain key account metrics back to pre-COVID-19 levels.

The doubtful debt allowance improved to 23.4% from 30.1% of trade receivables at June 2020 as the impact of the hard lockdown rolled through the portfolio and account collections improved. This contributed to debtors costs decreasing by 52.6%.

Gross trade receivables totalled R5.4 billion (2020: R5.5 billion) while the number of active accounts was almost unchanged at 2.6 million. Account sales comprised 68% of Truworths’ retail sales.

Active account holders able to purchase at year-end were at 82% (2020: 77%) and overdue balances were at 15% (2020: 20%) of the book, highlighting its improving quality.

Office turnaround

While the turnaround plan in our shoe and sneaker chain in the UK has been impacted by COVID-19 lockdowns, it is encouraging that the recovery is gaining traction and the business returned to profitability this year.

The store portfolio continued to be rationalised and trading space was reduced by 22.0% as 28 marginal and loss-making stores and 3 concession outlets were closed. Office now has 98 stores across the UK, Germany and the Republic of Ireland.

Trading space is planned to decrease by approximately 12% for the 2022 financial period as Office continues to exit non-profitable stores as leases expire.

Measures were introduced to curtail expenditure to ensure the long-term viability of Office, including a redundancy programme which has resulted in a saving of approximately 15% on the head office payroll.

We are also reaping the benefits of adopting many tried and tested Truworths best retail practices in Office, reflecting in the improved gross margin through better inventory management in the past year.

Office remains a strong brand and a key strategic partner to the world’s leading fashion footwear brands. As we position the business for growth we will be investing to expand and enhance the e-commerce offering, remodel key high-profile stores and replace the inventory management, merchandise planning, warehouse and distribution systems.

Management and succession

Talent management and succession planning are key to the long-term success of our business and this has been an area of increased focus over the past few years. Succession planning is well managed and the succession process is covered in the Chairman’s Report.

My long-time colleague Doug Dare, the Buying and Merchandising Director of Truworths, retired at the end of May 2021 after a career spanning 37 years with the Group. Doug held leadership roles in merchandise buying and planning, retail operations, marketing and human resources, and we thank him profusely for his contribution in making Truworths the country’s leading fashion retailer. We are pleased that Truworths will continue to benefit from Doug’s unrivalled industry knowledge as he has been contracted in a part-time project consulting role.

As part of the Group’s succession plan, Sarah Proudfoot was promoted to the newly created position of Deputy Managing Director of Truworths Ltd. Sarah, who has worked for Truworths for 25 years, was our Merchandise and Marketing Director and was appointed to the Truworths Ltd board in 2016 and as an executive director of the company in 2019.

We welcomed Emanuel (Mannie) Cristaudo back to the Group in July 2021 as Chief Financial Officer (CFO). Mannie served as a director of Truworths responsible for credit risk, credit operations, marketing and information systems for 16 years before leaving the Group in 2013. I would like to thank Reon Smit for his outstanding contribution as Acting CFO prior to Mannie’s re-appointment.

Seven new directors were appointed to the Truworths Ltd board in February 2021, increasing diversity at executive level and strengthening the depth of succession candidates. The members of this board have an average tenure of 22 years and collective experience of over 200 years with the company.

We have also strengthened the management in Office in the UK with the appointment of Jon Richens as Designate Managing Director in July 2021 and as Managing Director in September 2021. Jon has more than 25 years’ experience in retail, including 21 at the Arcadia Group where he was most recently Chief Operating Officer.

Impact of civil unrest

South Africa witnessed a wave of civil unrest and rioting in KwaZulu-Natal and Gauteng in July 2021 which temporarily disrupted parts of the Group’s operations. A number of the Group’s stores were targeted, resulting in stock losses, damage to property and equipment and loss of profits. The Group believes that it has adequate insurance cover to mitigate a significant portion of these losses.

57 stores of the Group’s South African portfolio of 758 stores were impacted directly and severely by looting and destruction of property. These stores would normally account for approximately 7% of the retail sales in the Group’s South African store portfolio. Another 160 stores were temporarily closed as a precautionary measure.

By 28 August 2021, 51 of the 57 stores that had been impacted directly had been reopened. The remaining 6 stores were located in fire-damaged shopping centres and the timing of the reopening of these shopping centres have not been confirmed.


Thank you to our Chairman, Hilton Saven, and my board colleagues for their continuing support and wise counsel. Our executive teams and the many thousands of employees in Truworths and Office have performed superbly in adverse trading conditions and I thank them for their efforts through this particularly challenging period. I would also like to thank our committed employees who have adapted admirably to the COVID-19 working environment.

Thank you to our loyal customers who have continued to support us during these difficult times and we look forward to continuing to do our level best to exceed your expectations in the year ahead.

Michael Mark

Michael Mark
Chief Executive Officer

Outlook 2022
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The uncertainty around COVID-19 is likely to continue for many months and this will probably be compounded by vaccine hesitancy and roll-out rates in South Africa, potential new variants of the virus emerging and the risk of further waves of infection. Following a slow start, South Africa’s vaccination programme is slowly gaining momentum, with approximately 23% of the adult population fully vaccinated and just over 9% partially vaccinated to date.

The Group’s DNA as defined by its Business Philosophy, its unique position in the marketplace, its robust balance sheet and strong cash generation will continue to provide resilience in the current environment of depressed consumer spending.

Growth in the new financial period will be supported by continued recovery and growth in the debtors book, remodelling of emporium and large stores, new and expanded store retail concepts and brands, expansion of the e-commerce offering and investment in technology to offer customers a true omni-channel retail experience.

South Africa

COVID-19 vaccine programme slowly gaining momentum

Government taking a tougher stance on corruption and looking to partner with business community

South African Consumer Credit Health has been improving since Q3 2020 and is healthiest in over 10 years (TransUnion)

Initiatives to improve stability of electricity supply

High demand for commodities (platinum, palladium and rhodium) expected to lead growth

Rand/US Dollar exchange rate improving

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The Office turnaround plan aimed at restoring the profitability of the chain continues to gain momentum. The focus areas in the year ahead will continue to be on its unique positioning in the fashion shoe and sneaker markets, tight stock management, the closure of loss-making and marginal stores, remodelling of important high-profile stores, expanded e-commerce offering, and investment in IT systems and in payment options for customers, and ongoing expense control.

High street footfall is improving and the rapid roll-out of the UK’s COVID-19 vaccine programme, with an estimated 67% of the population already having been vaccinated, is expected to reduce the risk of further lockdown restrictions and support the recovery of the retail sector.


Positive outlook for GDP growth (expected around 7.5% for the year)

Manufacturing and service sector activity growing

Business optimism is at a record high

Rapid progress in vaccinations facilitated the gradual easing of lockdown restrictions