Business

Major retailer in South Africa expanding stores with a new twist

Luke Fraser

 ·31 Aug 2025

Retail group Truworths is spending millions as it plans to increase its trading space and expand its new concept standalone stores and ‘mini emporiums’.

As reported by the Business Times, Truworths is spending roughly R550 million to expand its trading space by 3% in the 2026 financial year. 

The group also wants to add more stores for Daniel Hechter and Ginger Mary, both of which have a single standalone store. 

The company’s streetwear brands, Fuel and Moskow, are also part of the group’s plans to expand into standalone stores. 

CEO Michael Mark said that a real estate opportunity exists to take some of its established brands to create “mini stores or mini emporiums.” 

The group is also investing in store refurbishment, as it anticipates a more favourable macroeconomic outlook over the next 12 to 24 months.

In the 2025 financial year, which ended in June, Truworths Africa opened 22 stores but closed 14, leaving its total South African stores at 810.

The store closures come amid a challenging time for the group, with its financial situation worsening. 

It said that the financial year began with cautious optimism following the election and the introduction of the GNU. 

Sentiment was buoyed by expectations of improved consumer confidence and the introduction of the two-pot retirement system. 

Expectations of lower interest rates did come to fruition, with some forecasts expecting GDP growth of 2% to 3% per annum. 

“However, much of this optimism failed to materialise due to a combination of geopolitical uncertainties – particularly around tariffs and rising tensions in the Middle East – and internal challenges within the GNU.” 

“Late deliveries of winter merchandise in the prior period due to port congestion and global shipping disruptions, combined with the delayed onset of winter in 2024, dampened seasonal demand.” 

This resulted in elevated markdowns in the first part of the financial period to meet terminal stock objectives. 

Weak trading conditions also necessitated increased in-season promotional activity to manage inventory levels effectively.

The group also maintained a prudent approach to credit granting, especially in the higher-risk credit segment, which dampened sales growth. 

The group said that its credit book remained resilient and well-managed, with credit quality continuing to improve during the period and demand for new accounts remaining robust. 

A significant investment in a new Truworths Africa Distribution centre was also completed during the quarter, with a large part of merchandise distribution transitioning to the facility.

Financials

Looking at the group’s financials, retail sales increased by 2.7% to R22.0 billion, with the group’s gross profit margin sitting at 51.3%. 

However, the group’s cost of sales also increased by 5.38% to R10.39 billion, outpacing revenue. 

Truworths’ profit for the year thus shrank by 28.31% to R2.80 billion, but its basic earnings per share shrank by 28.82% to 745.2 cents.

The group’s annual dividend per share was thus reduced 7.9% to 487 cents.