Note: This report is Truworths specific as Office is dealt with in the Office Operational Report. All references in this report are therefore to ‘Truworths' rather than to ‘the Group'.
Truworths strives to create winning merchandise ranges across the brand portfolio season after season, by predicting the latest fashion trends and then interpreting them into new and enticing clothing and accessories.
Rigorous processes are followed by the merchandise team to manage and mitigate the risk of fashion throughout the product life cycle, from forecasting and interpretation of international fashion trends, designing garments, planning and assorting ranges, sourcing and engaging suppliers, applying the highest quality standards, and managing production across the supply chain until the merchandise ultimately reaches stores.
Even in the current constrained consumer environment, Truworths increased retail sales by 14% and the gross margin reached 55.3%, highlighting the success achieved in managing the risk of fashion during the reporting period.
Youthful fashionable customer
Truworths has an enviable portfolio of exclusive market-leading brands which are collectively housed in one shopping environment to create the unique emporium store.
The business targets ‘one customer' who is youthful and fashionable, and the combination of exclusive brands aims to cater to the varied lifestyle needs of this customer, from leisure to work, to eveningwear, and every aspect of her/his life.
Truworths' fashion is aimed at making customers look attractive and successful and feel enthused with confidence, regardless of their age, size or other defining features. This single customer view eliminates the risk of segmenting the market by targeting different customer profiles, and provides clarity and focus to the buying and marketing teams.
Forecasting fashion trends
The Truworths ladieswear and menswear Fashion Studios drive the merchandise forecasting process. The Studios research international fashion trend information from a wide range of sources, including fashion fairs, online subscriptions and by following local and global street trends.
Designers work in partnership with buyers to track trends and formulate the main fashion directions for each new season. A design and customisation process is completed for each brand, providing direction on colour, fabric, print and trim in line with the latest emerging trends. Travel to northern hemisphere retailers and ongoing insights from consultants in the major fashion capitals of the world supplement these seasonal processes.
Consistent fashion formula
A consistent merchandise buying and planning formula is applied for every six-month season. Developed over many years, this process is constantly refined to remain relevant in the fast-changing fashion retail environment. Checks and balances at critical stages in the process limit the risk of fashion failure.
Garments are selected and designed to complement each range and to showcase the differentiating characteristics of each brand. Detailed planning and balancing of ranges ensures consistency of the merchandise offering and provides structure to the creative process.
Merchandise is sourced from a combination of local and international suppliers based on a carefully considered methodology that provides flexibility and reliability. Through each step in the process there is a focus on maintaining exacting quality standards that customers both value and expect.
The proven merchandise philosophy of buying ‘wide not deep' offers customers an extensive range of garments and styles to meet the multiple lifestyle needs of the customer. A limited quantity of each item and size ensures exclusivity, heightens fashionability and provides customers with an ever-changing shopping experience.
Merchandise processes are supported by leading-edge systems and technology. The current retail merchandising system is being upgraded to provide the capability and flexibility to support strategic initiatives such as e-commerce, multi-country expansion, customer loyalty and the integration of acquisitions, including Office. A product life cycle management system has been purchased for implementation, which is scheduled to commence in the new reporting period, providing advanced process management and control capability for product sourced locally and internationally.
Enhancing buying processes
Buying processes have been updated in recent years to align with the growth and increasing complexity of the business, and to continue to meet the challenges of the changing global fashion retail market.
These updated processes, which were applied in the creation of the summer 2015 and winter 2016 fashion ranges, have enhanced both the productivity and efficiency of the buying teams.
There has also been a focus on strategic procurement to capitalise on opportunities both locally and in various different countries of origin to expand the product range and to improve efficiencies in the timeline.
Expanding kidswear offering
Expanding the kidswear offering is one of Truworths' strategic growth drivers. Following the successful integration of Earthchild and Naartjie during the period, both brands have been incorporated with LTD Kids in the newly developed specialist Truworths Kids Emporium. These are three aspirational, upmarket brands, yet each has a different profile.
The merchandise team has focused on growing the LTD Kids range. Good growth in the LTD Kids sub-brands Max and Mia, and Zigy, contributed to kidswear retail sales increasing by 25% and by 79% including Earthchild and Naartjie.
Superior quality fashion
Truworths' quality standards are recognised as being among the best in the fashion industry. Central to the quality assurance process is an in-house fabric and garment testing laboratory. The laboratory is accredited by South Africa's Council for Scientific and Industrial Research (CSIR), providing assurance that the laboratory's methods and results are aligned with international standards.
The quality assurance team partners with local and international suppliers to ensure merchandise is manufactured to consistent quality and prescribed safety standards. Quality assurance workshops are held with both local and international suppliers to ensure alignment with Truworths' expectations and standards.
The international quality assurance team has increased its offshore travel to work more closely with new and existing sources of supply, and ensure manufacturers achieve these exacting quality standards.