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Group Strategy

Truworths International aims to be a world-class omni-channel retailer of fashion clothing, footwear, related merchandise and homeware, operating in both the southern and northern hemispheres. The strategy is aimed at ensuring a diversified mass market customer base in both developed and emerging market countries. The successful implementation of this strategy will result in an even more diversified earnings profile, improved returns for shareholders, and more value being created for its other stakeholders.

The strategy is supported by sound financial and capital management, information technology, human capital and operating systems, while our business philosophies guide all business practices and interactions with stakeholders.

The Group’s strategy has been consistently applied during the reporting period and the directors confirm that the strategy remains appropriate and is unchanged for the year ahead.



TARGET 2017: 22% – 27% | 2018: 22% – 27%



TARGET 2017: 30% – 35% | 2018: 26% – 31%



TARGET 2017: 51% – 55% | 2018: 51% – 55%



TARGET 2017: 21% – 25% | 2018: 20% – 25%

4.5 times


TARGET 2017: 3.0 – 4.0 times | 2018: 3.5 – 4.5 times

1.1 times


TARGET 2017: 0.9 – 1.3 times | 2018: 0.9 – 1.3 times



TARGET 2017: 25% | 2018: 25%


Medium-term growth strategies are developed by the board and management to enable the Group to deliver its long-term strategy.

These growth strategies are determined in relation to the Group’s business model, vision and purpose, material issues and the related risks and opportunities, macroeconomic conditions and competitive forces. The strategies are reviewed and amended annually.

The following growth strategies should be considered in conjunction with the Group’s value-creating business model, and the Material issues, risks and opportunities for Truworths and Office. The progress made against the delivery of these strategies is covered throughout the Integrated Report.

Medium-term strategic growth drivers Truworths and Office integration and collaboration Strategic acquisitions
Delivering against our strategy in 2017
  • Merchandising processes aligned to ensure best practice and consistent methodology
  • Implemented sophisticated merchandise planning system in Office
  • Office inventory turn increased from 2.7 times at June 2016 to 3.4 times at June 2017 (in pound sterling)
  • Office significantly reduced levels of marked down stock
  • Leveraged Office’s extensive expertise in online retailing in the development process of new Truworths e-commerce platform and websites
  • Investigated several strategic acquisition possibilities in conjunction with our advisers
Priorities and plans for 2018
  • Continue to align operating models of Truworths and Office, including policies, systems, measurement processes and business intelligence
  • Integration phased over three years to extract optimal value while limiting risk
  • Collaborate on the introduction of Office into South Africa through the launch of Office London footwear chain
  • Complement organic growth with acquisition of fashion businesses, with a focus on the UK and Europe, that meet the board’s investment criteria
  • Acquired Loads of Living1 (South Africa) in August 2017 to further diversify the Group’s product offering and earnings base by expanding into the lucrative South African market for sophisticated linen and homeware
  • Integrate the Loads of Living business into the Group’s systems, procedures and structures
Medium-term strategic growth drivers Account activities and portfolio optimisation Develop omni-channel retailing capability and launch e-commerce platform Product procurement and supply chain management Strategically aligned diversification
Delivering against our strategy in 2017
  • Several strategic account granting strategies to mitigate impact of affordability assessment regulations appear to be bearing fruit
  • Implemented strategies to grow sales to long-term customers
  • Improved collections performance in latter stages of the financial period
  • Launched loyalty programmes
  • Ongoing development of new e-commerce platform ahead of launch in 2018 financial period
  • Launched TruRoyalty and iDream loyalty programmes with more than 2 million non-account members
  • Enhanced supplier scorecard to improve performance measurement
  • Resolved implementation issues with new warehouse management system
  • Developed new picking technology and customised order management system for e-commerce channel
  • Continued engagement with local authorities on approvals for third distribution centre
  • Rolled out 18 Kids emporiums within larger emporium stores (LTD Kids, Earthchild and Naartjie)
  • Developed Office London concept for roll-out in the South African market during the 2018 financial period
  • Ongoing development of new e-commerce shop front website ahead of launch in 2018 financial period
Priorities and plans for 2018
  • Continued focus on account acquisition from generating applications to opening accounts
  • Account limit management of goodspending, good-paying customers
  • Enhance technology to improve collections (hosted contact centre, new collections system)
  • Transition to omni-channel customer engagement and next phase of migration to digital communication
  • Deeper and wider use of predictive analytics across the customer life cycle
  • Develop integrated omni-channel capability with defined store and online strategy
  • Launch e-commerce platform in first half of 2018 financial period with the relaunch of website for online shopping, with significantly enhanced functionality
  • Develop digital channels to increase customer engagement and grow online sales
  • Leverage the benefits of the recently launched loyalty programmes
  • Ongoing and close collaboration with the Office e-commerce team in the UK to leverage their experience in the more mature UK online market
  • Implement process enhancements to facilitate quicker turn around and to maximise flexibility to react to style sales performances to contain markdowns
  • Careful selection and management of strategic stock fabric that can be utilised for in-season trading to reduce lead times
  • Strengthen relationships with key local suppliers with understanding of Truworths’ processes to improve flexibility and capability to change styles based on trend or trade, very close to delivery
  • Focus on consolidating certain product types across the chain in order to leverage price benefits, and creating continuity and enhanced productivity for suppliers
  • Continued growth and investment in our in-house manufacturing division
  • Expand specialist Truworths Kids emporiums
Office London stores
  • Office London introduces a range of branded and in-house designed footwear in South Africa, drawing inspiration from the success of Office in the United Kingdom
  • Opened 10 stores in South Africa in August 2017
  • In-store offering to be complemented by online offering going live in the new financial period. Online offering will include wider range and will be available to cash and account customers
Medium-term strategic growth drivers Business philosophy Marketing, customer engagement and loyalty Product and planning Expansion and growth strategy E-commerce
Delivering against our strategy in 2017
  • Developed Office Business Philosophy for roll-out in 2018 financial period
  • Developed new Office mobile app for launch in 2018 financial period to improve shopping functionality and customer insight
  • Inventory turn increased from 2.7 times at June 2016 to 3.4 times at June 2017 (in pound sterling)
  • Significantly reduced levels of marked down stock
  • Maintained supplier relations through ongoing engagement and collaboration
  • Collaborated with Truworths on new store design concept
  • New 'in-store look-up' functionality further integrates the store and online channels
  • E-commerce accounted for 28% of total sales
  • Continued investment in online marketing contributed to significant e-commerce traffic increase
  • Introduced new delivery options for international customers and expanded delivery destinations network
  • Expanded online range
  • Introduced 'in-store look-up' functionality
Priorities and plans for 2018
  • Roll out Office Business Philosophy to employees
  • Build customer understanding across stores, digital and customer service to develop more consistent, personal and relevant communication
  • Develop customer-centric, loyalty-based marketing programme to drive new and repeat purchases and incremental sales
  • Define and document buying processes clearly and ensure new processes are streamlined
  • Perform a review of the supply chain
  • Focus on management of slow-moving stock
  • Agree most profitable sales and growth opportunities across all channels in the UK and internationally, while identifying new markets and new partnership opportunities
  • Roll out new store design to first three stores during August to October 2017
  • Grow revenue and profit by creating an omni-channel shopping experience that encapsulates the Office DNA and delivers to the high expectations of the Office customer

1. Subject to Competition Commission approval at the time of preparing this report.