• “Managed exchange rate” for local US$ sales to impact financial performance
  • Resurging inflationary pressures necessitates focusing on cash sales

  • Lag in consumer income growth to reduce consumer disposable income

ZSE-listed clothing retailer, Truworths says the regulatory environment and the deteriorating economic environment will continue to be a hindrance to normal trading.

This comes at a time when Zimbabwe is faced with a deteriorating economy as the local currency continues on a freefall against the United States dollar on both the foreign auction market and the parallel market coupled with rising inflation which went back to a three-digit figure for the first time since June last year to 131.7%.

“The “managed exchange rate” for local US dollar sales will have a negative impact on financial performance. The resurgence of inflationary pressures necessitates that the business reduces its exposure on Credit sales and focuses on Cash sales,” the Group said in a trading update for the third quarter ended 10 April 2022.

The Group added, “The lag in consumer income growth relative to increased inflationary pressures will reduce consumer disposable income.”

Meanwhile, the Group highlighted that the figures for the third quarter this year are not comparable to the same period last year due to the lockdown in the prior period as last year the business traded for five weeks only compared to thirteen weeks this year.

Going forward, the Group said it will focus on improving cash sales and productively controlling costs.

About Truworths

Truworths Limited is a fashion retailer operating through 257 stores in South Africa and 14 franchise operations in Africa and the Middle East. The Company's specialized retail formats include Truworths, Truworths Man, Daniel Hechter, In wear, Fine Jewellery, Elements and LTD. Truworths Limited offers a collection of leisure wear, formal wear, glamour wear and accessories for women.

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