South African retail group Truworths to enter budget clothing market with 15 stores

  • Reuters
  • Stock Market News
South African retail group Truworths to enter budget clothing market with 15 stores
Credit: © Reuters.

* Truworths says brand is youthful, fashionable

* Exploring atleisure brand to capitalize on casual wear trend

* CEO says casual wear trend not 'permanent'

By Nqobile Dludla

JOHANNESBURG, Feb 19 (Reuters) - South Africa's Truworths International TRUJ.J is entering the highly competitive budget clothing market with a new brand to be launched in 15 stores, looking to adapt to changing shopping habits since the emergence of the novel coronavirus.

The global apparel industry is reeling from a punishing 2020, when shops were forced to close to prevent the spread of the virus and consumers switched formal dresses for sweat pants. Shoppers also prioritised essentials over clothes.

The move will help attract young, casual yet fashionable, but on a budget, shoppers into Truworths' stable of high priced formal and glamorous clothing brands.

Announcing details of Truworths' many new store concepts and brands at a results presentation, group CEO Michael Mark told analysts that the aspirational value-brand, to be called Primark, "won't be at a low margin. We're an aspirational business and we prefer higher margins."

Truworths Primark brand has no connection to UK's AB Foods' ABF.L Primark.

The 15 stores will be launched in the next three or four months and the brand is "strategically aligned with suppliers that can react and respond with short lead times," he said.

South African fashion retailers are trying to improve their ability to quickly deliver batches of the latest designs to consumers by producing clothes locally, at a time when retailers are struggling to adapt to changing shopping habits.

In a sign of how retailers are adapting to changing lifestyles in the COVID-19 pandemic, the owner of Identity clothing brand and Earthchild kids brand is also potentially exploring an athleisure brand.

"We would always see it be fashion orientated rather than very performance orientated but that's a work in progress," Truworths Africa Deputy Managing Director Sarah Proudfoot said.

Even as Truworths is planning to launch new young shopper-focused and casual brands in the next few months, Mark does not believe that the casual wear trend is here to stay because people will return to offices, attend functions and entertain again.

"My view is that the trend towards casual wear is a very powerful one but we doubt it's permanent. It doesn't mean smart, structured formal wear and glamour wear is finished forever, never, it just might not come back so fast," he added.

Truworths reported a 7% decline in half-year headline earnings per share on Thursday.

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