Clothing retail giant Truworths-Zimbabwe (Truworths) suffered a significant decline in unit sales in the first half of the fiscal year ended January 2021 due to a deteriorating economic environment characterized by hyperinflation and low disposable income.
Units sold during the six-month period were down 23.3% from the previous year and this was the July-December trend on a monthly basis compared to similar months last year.
Due to hyper-inflationary conditions, Bekithemba Ndebele, CEO of Truworths, said: âThe company has reduced the granting of credit. During the six-month period, cash sales represented 66.9% of total sales and credit sales represented 33.1% of total sales.
The provision for bad debts represented 15.2% of gross debts against 12.6% in previous periods.
Worse yet, operational costs have increased and the problems have been compounded by the impact of the lockdown from the COVID-19 pandemic which has affected businesses tremendously.
Trading fees rose 21.7% in terms of hyperinflation.
âThere have been price increases in the main key expense lines such as occupancy costs, employment costs and other operating costs,â Ndebele said.
âOverall, the semester was negatively affected by Covid-19 trade restrictions, particularly the July-September period. noted.
The board of directors did not declare a dividend due to the need to fund increased working capital requirements in a hyperinflationary environment with limited supplier credit terms.