A womenswear booboo and other mistakes hurts Woolworths

Ujuh Reporter

A slip up in a range of womenswear seems to have cost Woolworths dearly over the past six months a period which saw a considerable decline in the profits of the retailing business.

Reporting its results today Woolworths flagged amongst other key challenges a slip up in womenswear.

The group said Woolworths Fashion, Beauty and Home was negatively impacted by the under-performance of womenswear, while other categories performed in line with the market. Sales decreased by 0.2% and comparable store sales were 3.4% lower.

Woolworths Group CEO, Ian Moir, said “A challenging market, along with some mistakes in the implementation of new systems and ranges, has had an impact on our clothing businesses both in South Africa and Australia. Food operations, however, continue to perform strongly, with market-leading growth in South Africa and positive results from the initial rollout in Australia.”

The group is hopeful the womenswear slip up will be fixed and the business will see some turnaround.

In South Africa, said the group, trading conditions are expected to remain challenging in the second half, but should then improve, as the impact of the new political leadership resonates through the economy and consumer sentiment.

“We are confident that recent changes made to design and buying structures are expected to improve the womenswear offering. Our Beauty business saw strong sales growth for the period, demonstrating our focus on transforming Beauty into a destination category through the introduction of leading international brands and a strong private label business and online offer.

The overall group results, which include, David Jones in Australia, were not great. Group sales for the first 26 weeks of the current financial year increased by 2.5% to R38.8 billion. This said the group reflected continued challenging trading conditions in both South Africa and Australia. Adjusted profit before tax of R3.0 billion was down 8.8% from last year’s R3.27 billion.

The group said Woolworths South Africa’s overall performance was slightly ahead of last year, due to a strong result from Food and Financial Services.


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