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Truworths revenue up

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CLOTHING manufacturer Truworths’ halfyear profits spiked 52% to $1 million attributed to improvement in gross margins and growth in credit accounts.

CLOTHING manufacturer Truworths’ halfyear profits spiked 52% to $1 million attributed to improvement in gross margins and growth in credit accounts.

Report by Tarisai Mandizha

In the 26 weeks to January 6, the group’s number of active accounts increased by 11,2% to 74 563 from 67 078 over the same period last year.

Retail sales for the period under review increased to $13,2 million from $12 million over the same period last year. Revenue for the group increased to $13,8 million for the period under review from $12,4 million in the prior year.

Merchandise sales were up 10,1% compared to the 26 weeks ended January 8 2012.

“At period end 85,5% of the groups’ accounts holders were able to make purchases compared to 87,1% in the prior period.

“The trade receivable book performed in line with expectations,” Truworths chief executive officer Bekithemba Ndebele said.

“Net bad debts as a percentage of credit sales was 0,1% compared to 1,8% in the period due to better collections and recoveries.” He said the individual chain performance for the group, Truworths recorded a value increase of 11,4%, Topics (5, 6%) and Number 1 Stores (28,8%).

He added that the provision of doubtful debts as a percentage of gross trade receivables was 4,7% compared to 5,2% last year. Truworths operates Topics, Number 1 Stores and Truworths Man.

The company offers a collection of leisure wear, formal wear, accessories for women, as well as shoes, bags, clothing accessories, fine jewellery and watches.

However, Ndebele said the new amendment on Southern African Development Community (Sadc) tariff regulations would make its products more expensive for consumers. He said the group imports most of its fabrics outside the Sadc region hence the decision did not make economic sense.

Under the guidelines, in order for the goods to enjoy the trade concessions under the market access regulations, fabrics and yarn for garment manufacturing had to be produced within Sadc to qualify for preferential treatment. “Fabric has to be made within the Sadc region, it’s a disaster because we don’t have fabric in Sadc,” Ndebele added.