default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Woolworths Falls as Australia's David Jones Clothing Sales Slow

Revenue increased by 2.5 percent in the second half of 2017, compared with 6.7 percent the previous year, while stock slumped as much as 9 percent.
Woolworths department store in Cape Town, South Africa | Source: Shutterstock
By
  • Bloomberg

CAPE TOWN, South Africa — Woolworths Holdings Ltd. plunged the most in almost two years after South Africa's largest food and clothing retailer said sales growth slowed in the fiscal first half, while earnings also declined.

Revenue increased by 2.5 percent in the 26-week period ending December 24, compared with 6.7 percent the previous year, the Cape Town-based company said in a statement on Monday. Sales at Australian unit David Jones fell, as did revenue in the South African fashion, beauty and home division.

The weak performance at David Jones was “related to changes in styling and the increased introduction of private label Woolworths brands,” Alec Abraham, an analyst at Johannesburg-based Sasfin Securities Pty Ltd., said by phone. “In South Africa, the fashion performance is unsatisfactory.”

The stock slumped as much as 9 percent, the most since February 11, and traded 6.1 percent lower at 59.49 rand as of 9:57 am in Johannesburg. Trading volumes were more than 42 percent of the three-month average less than an hour into the session.

Woolworths’s performance shows that its focus on wealthier South African customers hasn’t made it immune from an environment of weak consumer confidence in the country, partly caused by unemployment of almost 28 percent. Retail sales growth slowed in October, the most recent month for which data is available, and was weaker than economist estimates. South Africa’s new ruling-party leader, Cyril Ramaphosa, said on Saturday that economic revival was one of his main priorities, and that he sees higher growth in 2018 than the 1.2 percent forecast by the central bank.

Headline earnings per share are expected to have declined between 12.6 percent and 17.5 percent over the relevant period.

By Janice Kew; Editors: Eric Pfanner, John Bowker, John Viljoen

In This Article

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
Voices2021
© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
Voices2021