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JOHANNESBURG, July 26 (Reuters) - South African fashion retailer Truworths International reported on Tuesday a 9% rise in annual sales as lockdown restrictions eased at home and in the United Kingdom.
Shares in Truworths, which also owns UK-based shoe chain Office, jumped more than 9% on the results.
The company said sales for the year that ended July 3 rose to 18.5 billion rand ($1.11 billion), from 17 billion rand a year earlier.
Although waves of the COVID-19 pandemic were less severe than in the prior period ended June 2021, the pandemic caused wide-scale global supply chain disruptions in the form of port congestion, container shortages and significantly increased freight costs, Truworths said.
“In South Africa, further relaxation of COVID-19 restrictions during the current period contributed to a normalising economy, which was favourable for consumer sentiment, and ultimately retail spending,” Truworths said.
In the United Kingdom, trading conditions were much improved in the current period with no restrictions affecting the group’s stores, workers returning to the office and a rebound in tourism.
This contributed to sales growth of 7.5% in Truworths Africa to 14 billion rand, while sales grew by 16.6% in sterling terms and by 14% in rand terms.
Truworths’ shares were up 9.14% at 52.53 rand at 1012 GMT, but down 0.8% since the start of this year.
Product deflation in Truworths Africa averaged 0.6% for the current period, compared to product inflation of 1.4% in 2021.
While the Office shoe business planned to reduce trading space by approximately 12% in the current period as part of the group’s strategy of exiting marginal and loss-making stores, “favourable negotiations with landlords and the stronger than expected post pandemic recovery in store performance resulted in trading space decreasing by only 4.4%,” relative to 22% in the prior period, Truworths said. ($1 = 16.6918 rand) (Reporting by Nqobile Dludla; Editing by Kirsten Donovan and Susan Fenton)
