INTEGRATED REPORT 2023

X
CREATING SUSTAINABLE VALUE

GROUP STRATEGY

Our Group is guided by Our Business Philosophy, which we use as our beacon to guide us in all that we do. The Business Philosophy comprises three elements: Our Purpose, which is the reason we try to make a difference in the lives of our customers; our Values that guide how we prefer to behave; and A Vision for each stakeholder group that we use as the measure of how successful we are considered to be. EAch respective Vision describeS the expectations of our primary stakeholders and how the business is assessed in terms of creating significant sustainable value over time.

The Group strives to achieve its strategic objectives by developing and successfully executing strategies within Truworths and Office. The Group delivers on these strategies through short and medium-term action plans and projects, which are developed and implemented each year, outlined in the Material issues, risks and opportunities, Chief Financial Officer's Report, Truworths Operational review and Office Operational review.

These strategies, together with the related short and medium-term action plans, inform the strategic targets for the Group's short and long-term incentive schemes, thereby aligning executive reward with shareholder value creation.

DELIVERING ON OUR VISION THROUGH STRATEGIC OBJECTIVES

TIME HORIZON

SHORT TERM
ONE TO THREE YEARS
MEDIUM TERM
THREE TO FIVE YEARS
LONG TERM
FIVE TO SEVEN YEARS
OUR VISION
STRATEGIC OBJECTIVES

FOR OUR SHAREHOLDERS...

'We are long-term investors in Truworths International because we trust in management's capacity to execute innovative strategies which deliver significant value over time.'

  • Deliver significant shareholder value over time through efficient financial and capital management to ensure long-term growth

FOR OUR TRUWORTHS CUSTOMERS...

'Truworths helps me look attractive and feel successful and confident. Shopping at Truworths is exciting because it offers a wide range of curated and tasteful fashion of superb quality and intrinsic value in retail emporiums that are visually appealing and are staffed by passionate and knowledgeable staff.'

  • Maintain Truworths' aspirational better-end fashion positioning through a broad offering of exclusive fashion styles and brands
  • Offer Office customers the latest shoe and sneaker styles from leading global brands, complemented by own-brand fashion footwear
  • Offer customers access to aspirational merchandise by facilitating multiple payment alternatives in Truworths and Office (including responsible in-house credit in Truworths)

FOR OUR OFFICE CUSTOMERS...

'Office is the first place I go when I want to see a wide range of the latest high-quality shoes from in-demand fashionable brands that make me feel attractive, cool and confident. Shopping at Office is effortless, whether I am online or in store, with a range that allows me to express my individuality and create my shoe wardrobe.'

  • Maximise supply chain efficiency to reduce fashion risk and improve our ability to distribute merchandise
  • Create enticing and modern store environments, including modern technology by developing new store concepts and upgrading retail stores
  • Create a market-leading omni-channel experience by enhancing our digital capability and creating a seamless in-store and online offering

FOR OUR EMPLOYEES...

'I am totally committed because my team members and I are encouraged to contribute innovatively and celebrate and reward excellence in contribution.'

  • Attract, develop and retain appropriate talent while celebrating and rewarding successful performance
STRATEGIC ENABLERS
Sound financial, information and operating systems
Strong governance culture and practices
Robust balance sheet and cash generation
Motivated and engaged people
Active stakeholder engagement
Responsible citizenship

LONGER-TERM STRATEGY

Every strategic decision in our business is determined with reference to our Business Philosophy. The Business Philosophy is our guiding light in prosperous and challenging times, ensuring we remain true to our DNA. We continuously review our Business Philosophy in the context of our ever-evolving operating environment and adjust it to ensure our business remains relevant and able to continue to deliver on the Vision for all our stakeholders.

Our mindset is long term. The business has been positioned for the long term and we believe the factors that currently differentiate the Group will continue to be relevant well into the future.

TIME HORIZON

SHORT TERM
ONE TO THREE YEARS
MEDIUM TERM
THREE TO FIVE YEARS
LONG TERM
FIVE TO SEVEN YEARS
LONGER-TERM STRATEGIC OBJECTIVES
DRIVERS OF LONGER-TERM GROWTH STRATEGY

Maintain aspirational appeal to the emerging and established middle-class market who aspire to be fashionable and to wear higher-quality merchandise that makes them look good and feel attractive.

  • Ownership of a unique and exclusive portfolio of aspirational brands which cater for multiple lifestyles.
  • Development and growth of new brands which cater to the specific lifestyles of our customers.
  • Premium third-party brands (primarily in Office from leading global footwear suppliers).

Continue enhancing stores with a focus on the emporium concept and developing new store concepts.

Invest in omni-channel initiatives and online channels to create a seamless customer experience.

Grow brand equity to build trust and increase customer satisfaction and loyalty.

  • Real estate in prime positions.
  • The Truworths Emporium concept, along with the Truworths Kids Emporium, Identity Megastore and Context in South Africa and the innovative new store design concepts in Office, will elevate the store portfolio of the future.
  • Invest in world-class technology and capability, and apply
    e-commerce learnings from the more advanced Office experience to the South African market.
  • Create new brands with specific lifestyle opportunities and invest in areas where we are under-represented.

Adapt and respond to changing consumer shopping behaviour and patterns to remain at the forefront of innovation and technology.

  • Lessons learnt from trading through the COVID-19 pandemic will inform the Group's responses to changing market dynamics in the longer term.

Continue to utilise customer accounts as the primary driver and enabler of sales to Truworths' mainstream middle-income customer.

  • Strategy to be supported by the strength of Truworths' internally funded and managed credit book.

Pursue an active capital management strategy to maximise returns to shareholders through a combination of share price appreciation, dividend payments and share buy-backs.

  • Growth to be underpinned by a strong balance sheet and robust cash generation.

Maintain focus on organic growth, supported by bolt-on acquisitions in new and strategic categories where the Group is under-represented.

  • Barriers to entry to replicate the Group's business model are high. South African retailers have proven to be globally competitive and resilient to international entrants into our local market.
INTEGRATED REPORT 2023