Retailer Truworths has maintained its strong sales performance and remains one of the best fashion operations in the country, according to a retail analyst.
"Truworths is still pumping. Their update was better than expected, with consistent sales growth over a period where a slight reluctance to spend still prevailed," the analyst said.
The group said on Friday sales for the 26-week period - from June 28 to December 26 - increased by 15.3% to R4.4-billion.
With the recession a not-so-distant memory, many consumers have been wary of over-spending, but lower interest rates and above-inflation pay increases in some sectors have allowed for a gradual increase in spending.
The group sells Truworths, Daniel Hechter, LTD and Ginger Mary clothing lines. It said that comparable retail sales increased by 10.6% and product inflation averaged 1%, while trading space increased by 4.4% relative to the prior corresponding period-end.
"Credit sales contributed 70% to retail sales and the debtors' book continued to perform satisfactorily as anticipated," the giant said.
The retail analyst said that consumers were reducing their debt and this had allowed them to regain some appetite to spend on credit. "This should bode well for the furniture sector, where most sales are credit-based," he said.
At the end of the 26-week period, the group's gross debtors' book had increased by 16% to R3.3-billion, relative to the corresponding period last year.
Truworths passed the 500-store mark last year and posted a 12% rise in full-year profit. But the darling of the retail scene might have to watch its back because in March the world's biggest fashion retailer by sales, Inditex, will enter the South African market and open its first Zara store in the country.
Inditex's stable includes clothing chains Massimo Dutti, Bershka and Oysho. It is one of Spain's most lucrative businesses, reporting net profit for the nine months of $1.76-billion last month.
Falling into the category of high-street shopping experience, the Zara brand has long been salivated over by South African shoppers travelling abroad, so its imminent arrival will be the zenith of retail therapy for shoppers.
When asked if Truworths was worried about the competition, CEO Michael Mark said last year that it was not at all threatened and rather admired the "massive world group".
"The unique thing about clothing is that if you give customers the right merchandise, they'll buy. We do that. Other retailers do that.
"Why should we be fearful? Competition is always great. We've never found that when our competition is doing well at something, we're doing badly at it," Mark said.
Truworths interim results are due to be announced on February 21. - I-Net Bridge