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Truworths has continued to follow its strategy of cautiously investing in new trading space to promote sales growth and gain market share.

Store footprint increased to 781 stores (2016: 770 stores)
Net 11 new stores opened across all brands (2016: 23 stores)
Footprint in the rest of Africa unchanged at 47 stores
Total retail trading space up 1.6% to 369 000 m2
Approximately 4% trading space growth planned for 2018

DEFINING THE FASHION COURT

Truworths aims to define the fashion court in major shopping malls by trading from the best positions in these fashion courts and to be recognised as one of the leading fashion anchor tenants.

This strategy also applies to stores on main streets in cities and towns where Truworths aims to be at the heart of the fashion retail zone.

Enticing stores and internationally styled merchandise position Truworths as an aspirational destination for quality fashion apparel. Creative merchandise displays in long window frontages, often with multiple entrances, showcase the latest looks and the breadth of fashion on offer, and are designed to attract customers and encourage them to purchase.

STORES IN THE REST OF AFRICA

Trading conditions in some countries of operation in the rest of Africa have been extremely challenging owing to depreciating currencies and weakening consumer economies across the continent. The store base remained at 47 as no new stores were opened during the reporting period.

Truworths is committed to its strategy of cautious growth in the rest of Africa. The store footprint will be expanded in the 2018 financial period with the opening of the first two stores in Mozambique, two additional stores in Kenya and one in Namibia.
The process to close the four stores in Ghana by December 2017 has been initiated.

GROWING FOOTPRINT IN SOUTH AFRICA

A total of 24 stores was opened across all brands, with 13 stores in South Africa being closed, bringing the national store footprint to 734.

Kidswear is a strategic growth driver for Truworths. A further 18 Kids Emporiums, housing LTD Kids, Earthchild and Naartjie, were opened within existing emporium stores, increasing the footprint to 32.

During the reporting period, 21 stores were either expanded or relocated to positions with better trading prospects. A further 11 stores were renovated and upgraded in their current locations.

Management continues to increase store productivity by reducing space in selected stores when leases fall due for renewal, with five stores being reconfigured by decreasing leased space to grow trading densities.

Truworths continues to capitalise on opportunities in new malls being developed in previously under-developed areas.

Rental escalations averaged 7% during the reporting period. While the arrival of international retailers in South Africa is providing landlords with greater negotiating power in major malls, the recent demise of some local retailers and withdrawal of foreign retail brands is placing pressure on landlords.

Consolidation in the property sector has resulted in a reduction in the number of landlords as malls are now owned and managed by fewer property funds.

Number of stores Trading space (000’s m²)
Corporate stores 2017 2016 2017 2016
Truworths Emporium 344 339 271 266
Identity 248 244 69 68
Uzzi 52 53 4 4
Earthchild and Earthaddict 43 44 3 3
Truworths Menswear Emporium 37 34 12 11
Naartjie 27 29 2 3
YDE 21 20 7 7
Daniel Hechter 3 3 –* –*
LTD 2 2 –* –*
Ginger Mary 2 2 –* –*
Naartjie and Earthchild 2 –*
Total 781 770 369 363
*   Reflects as zero due to rounding.

RETAIL PRESENCE IN 2018

Store expansion

Truworths plans to open approximately a net 45 new stores across all brands in the 2018 financial period, with trading space projected to increase by approximately 4%.

This includes the launch of the fashion footwear brand, Office London, in South Africa. The first 10 Office London stores were opened early in the new financial period.

Average rental escalations are anticipated to remain at the current approximately 7% level. Capital expenditure of R353 million has been committed to the store expansion, renovation and upgrading programme.

Launch of new online store

The new Truworths e-commerce platform and online store, which is planned for launch in the first half of the 2018 financial period, will enable both account and non-account customers to shop effortlessly across a range of digital devices. Customers will ultimately have access to the full range of Truworths, Identity and Office London merchandise online.

New order fulfilment and payment solutions are being incorporated into the shop front website and customers will have the option of selecting home delivery or ‘click & collect’ in store. The recently launched Truworths (TruRoyalty) and Identity (iDream) customer loyalty programmes will be integrated with the new Truworths online offering.

MULTIPLE STORE FORMATS

Stores are designed to offer customers an exciting fashion retail experience where they can shop for an innovative and adventurous blend of colour, fabric and fashion styling of international standard.

Truworths emporium stores

Truworths has a portfolio of exclusive market-leading brands which are collectively housed in one shopping environment to create the unique Truworths emporium store.

The store format encourages customers to cross-shop between the mainstream brands such as Truworths, Truworths Man, Uzzi, Daniel Hechter, LTD, Earthaddict, LTD Kids, Earthchild and Naartjie. These brands, together with their sub-brands, retain their unique identity and fashion styling within the emporium.

The brands on offer in each emporium depend on the size and location of the store. Following the expansion of the Truworths brand portfolio in recent years, four specialist emporiums are now offered within the greater emporium store: Truworths Ladieswear, Truworths Menswear, Truworths Designer and Truworths Kids.

Emporium stores are located in central positions in shopping malls and generally have three to five entrances, with maximum shop frontage and windows showcasing the broad range of brands and merchandise.

Identity and YDE stores

Identity and YDE operate from stand-alone stores. These brands are not included in emporium stores as they target a different customer profile to Truworths’ shoppers.

Identity appeals to the fashion-forward and value-conscious youth market, offering high fashion merchandise at affordable prices. Stores are therefore vibrant, edgy and fun to appeal to these younger customers.

YDE showcases the fashion of emerging South African designers and targets young fashionable customers desiring designer labels and styling. The store design creates a strong point of differentiation from competitors.

Office London stores

The first 10 Office London stores were opened in South Africa during August 2017. The store design encapsulates the essence of what is new and fun, using a disparity of materials and contrasting rough and smooth surfaces to create a playground for the discerning, style-conscious customer.

Office London operates from stand-alone stores in central positions in shopping malls, often adjacent to the Truworths emporium. Where possible, Truworths will utilise its existing prime real estate locations in malls to grow the Office London footprint, thereby creating an opportunity to improve the efficiency of existing Truworths emporium stores.