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TRUWORTHS

ASPIRATIONAL
FASHION
Truworths strives to create aspirational, better-end and authentic merchandise ranges across its brand portfolio season after season, offering customers internationally inspired fashion of superior quality. This is supported by Truworths' merchandise philosophy of creating an extensive range of fashion apparel and related accessories that meets the lifestyle needs of its customers.


MANAGING THE RISK OF FASHION
The merchandise planning and buying teams manage and mitigate the risk of fashion across the product lifecycle through the following processes:
- forecasting and interpreting international fashion trends and customising these trends for the South African market;
- creating product designs through in-house fashion design specialists and selected supplier teams working together with experienced buyers;
- using world-class systems in planning and assorting ranges;
- following a preferred supplier approach to ensure consistency in the supply chain, with many suppliers being exclusive to Truworths; and
- using the fast fashion and quick response capability to capitalise on new trends and popular styles through local manufacture and investing in strategic fabric.
THE YOUTHFUL, FASHIONABLE CUSTOMER
Truworths targets a youthful and fashionable customer and, through its exclusive market-leading ladies' and men's brands, aims to cater to the varied lifestyle needs of this customer, from casualwear to workwear, eveningwear, accessories and footwear.
Fashion is aimed at making customers look and feel attractive and successful. This single customer focus on youthful, fashionable South Africans removes the risk of over-segmenting the market and provides clarity and focus to the buying and marketing teams.
Refer to Material issues, risks and opportunities for more detail.
FORECASTING FASHION TRENDS
The Truworths ladieswear and menswear fashion studios drive the fashion forecasting process. The studios, research international fashion trend information from a wide range of sources, including catwalk collections, trade fairs, online fashion intelligence, influencers and social media, and by following global and local street trends.
Merchandise designers from these studios and in-house design centres work in partnership with buyers to understand the trends and formulate the required fashion direction for each new season. A design and customisation process is completed for each brand, providing direction on style, colour, fabric, print and trim, in line with the latest emerging trends. Season-ahead travel to the northern hemisphere supplements and confirms these seasonal processes.
Similarly, homeware ranges for Loads of Living and Loads for Kids require the buying team to monitor local and international interior and lifestyle trends to meet the needs of discerning homeware customers.
CONSISTENT FASHION FORMULA
A consistent merchandise buying and planning formula is applied every season. This process is constantly refined and updated to align with the growth and complexity of the business, and to continue to meet the challenges of the fast-moving and evolving global fashion retail market. Checks and balances at critical stages in the process limit the risk of fashion failure.
Collections are carefully curated and designed with the DNA and end-use of each brand in mind to create a broad and exciting range of ever-changing products to entice the customer. The focus on creativity in the buying process has been elevated to ensure that the buying teams have additional time to drive product design and innovation within the assortment process.
Leading-edge systems and technology are applied to enable detailed planning and balancing of ranges, ensure consistency in the merchandise offering and provide structure to the creative process.
Merchandise is sourced from a combination of local, regional and international suppliers based on a carefully considered methodology that provides flexibility and reliability, and mitigates supply chain risk. At each stage in the process there are interventions to ensure that the merchandise meets the exacting quality standards that customers both value and expect.
SUPERIOR QUALITY FASHION
Truworths is synonymous with quality fashion and better-end fabrics, with industry-leading metrics for low levels of quality-related customer returns. The quality assurance team partners with local and international suppliers to ensure merchandise is manufactured to consistent quality and prescribed standards.
The in-house fabric and garment-testing laboratory, accredited by South Africa's Council for Scientific and Industrial Research, ensures that the laboratory's methods and results are aligned with international standards.
MANAGING FASHION IN 2024
In the constrained consumer spending environment, which prevailed throughout the financial period, Truworths' merchandise strategy continued to be directed by its Business Philosophy which guides decision making in good and bad times. The merchandise teams have focused on offering value-add to ensure that garments provide real intrinsic value, without compromising on quality and fashionability and without changing strategy to compete in the 'value segment'.
Global supply chain challenges resulted in the late delivery of imported product and fabric, which impacted seasonal products and the merchandise mix in stores. The challenges with imported fabric also affected local production.
Unseasonably warm weather stretching into late May and the late onset of the 2024 winter season in mid-June negatively impacted sales of winter products.
A key merchandise objective has been to drive sales growth to increase market share in specific product categories which are under‑represented in the merchandise assortment. While growth initiatives were unfortunately constrained by supply chain challenges, reasonable progress was achieved in certain of these key opportunity categories. This remains an area of ongoing focus and opportunity.
Managing the impact of exchange rate volatility is a perennial challenge as approximately 55% of Truworths' merchandise is sourced offshore. The impact of the movement in the Rand on product pricing was compounded by the uncertain social and political environment in South Africa in the second half of the period ahead of the general elections in May. The volatility is reflected in the currency trading between a low of R17.16 and a high of R19.75 against the US dollar during the financial period. Forward cover contracts mitigate currency risks and assist the buying team to accurately determine pricing and input margins during periods of rapid exchange rate movements.
The supply chain disruption experienced during the financial period impacted optimal stock levels and, together with the late onset of winter and constrained demand, necessitated slightly elevated levels of promotional activity and markdowns to achieve end-of-season terminal stock levels, negatively affecting the gross profit margin. A number of interventions have been implemented to curb the impact of supply chain disruption in the period ahead.
ENTRENCHING RECENTLY LAUNCHED BRANDS
New brands and ranges are constantly developed to address the many lifestyle needs of customers. While no new brands were introduced into the portfolio during the reporting period, the merchandise and operations teams focused on entrenching the most recently developed brands, Fuel and Sync. The store presence of both brands continued to be expanded, while the product offering was extended to include shoes, bags and accessories.
Fuel offers highly fashionable lifestyle product to the trendy, youthful customer. The brand's store footprint increased to 52 across stand-alone stores and departments in emporium stores.
Sync offers lower priced merchandise to consumers who choose to spend less, with the product offering including casual fashion ranges and own-brand sneakers and accessories. Sync is positioned as a separate brand, distinct from Truworths and Identity, with a focus on lower-priced, fashionable and good quality merchandise. Following the opening of seven new stores, Sync has grown its presence to 26 stores.
ENHANCING ONLINE CUSTOMER EXPERIENCE
Customer demand for online shopping continued to gather momentum as e-commerce sales grew by 34% accounting for 4.9% of total segment retail sales (2023: 3.5%).
The shopping experience of Truworths' online customers was enhanced with ongoing improvements to the website. This included the introduction of product recommendations based on user behaviour, abandoned basket reminders and other features aimed at growing online sales. Digital communication was enhanced to ensure customers are regularly updated on their order delivery status. Improved efficiencies in the order fulfilment process, with an increased focus on picking e-commerce orders from a greater number of stores and the nearest location, has resulted in reduced delivery times for customers, and reduced costs for Truworths.
All Truworths products and brands are available on the Truworths, Office London, Loads of Living and Identity e-commerce sites. Customers are able to shop with a single basket across the three Truworths sites (Truworths, Office London and Loads of Living). Together with the extensive Truworths store footprint, this creates an engaging omni-channel experience for customers to shop effortlessly in-store and on digital devices.
The YDE website went live on the Truworths platform during the period, with YDE customers now able to shop online with their accounts.
Ongoing collaboration with the Office digital team in the UK ensures that the Truworths website is aligned with the functionality and offering of the more established Office UK site.
TECHNOLOGY SUPPORTING MERCHANDISE PROCESS
Ongoing systems enhancements and new technologies to support the merchandise buying and planning process are aimed at managing fashion risk and ultimately improving the customer experience.
Merchandise systems and processes have been enhanced by automating manual tasks in the planning process, upgrading the product lifecycle system to better utilise the glass pipeline as well as further markdown and planning improvements. The merchandise planning system has been upgraded to improve store demand planning functionality and improve the speed of markdown implementation to increase flexibility in the timing of markdowns.
Artificial intelligence (AI) presents a major opportunity to support the merchandise planning and buying functions and trials are being conducted on several potential AI solutions. Testing of AI in product development is showing positive initial results, while the application of AI is also being evaluated in merchandise planning.