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Rex Trueform posts profit fall of 138.3%

9 Sep 2013

Rex Trueform‚ which reported a 138.3% fall in full-year profit, said its retail segment would remain under pressure in the 2014 financial year as international brands continued to enter the local clothing retail market‚ intensifying industry competition.

Rex Trueform posts profit fall of 138.3%

The company‚ which owns J Crew and Queenspark‚ last week reported a headline loss per share of 47.4c for the year to June, sharply down from the 123.7c profit last year.

International fashion retailers‚ which are famed for getting products based on the latest catwalk trends into stores in as little as two weeks and are now starting to get around reverse seasonality by creating ranges that are less season-sensitive‚ allowing them to ship further afield. New items appear in global retail company Zara's stores twice a week and the brand has created a range specifically for the southern hemisphere.

Topshop's stores in SA receive new stock every week.

While their footprint is dwarfed by the presence of local market operators‚ being that nimble has spurred Foschini Group‚ Woolworths and Truworths to pay more attention to their fashion lines by shortening their merchandising cycles.

"The outlook for retail sales continues to be affected by the slowdown in the growth of economy‚ consumer debts levels‚ tight lending standards and rising living costs. Ongoing weakness in the rand exchange rate against the dollar will continue to add inflationary pressure to the cost of merchandise‚" Rex Trueform said.

Revenue for the year decreased by 10.7% to R484m and operating costs increased by 1.8% to R265.5m and included a R3.1m retrenchment provision incurred as a result of the reorganising of the retail business. The loss after tax amounted to R9.5m from a profit of R23.8m last year.

"The development of the Rex Trueform Office Park in Salt River continued during the year. The segment made a small operating loss for the year‚" it said.

Turnover in the Queenspark retail stores was R474.4m‚ a decrease of 10.6% on last year. Operating profit declined by 151.3% resulting in loss of R14.7m for the year.

Looking ahead‚ the group said "certain" strategic initiatives initiated during the year were expected to positively affect it in the year ahead.

Rex Trueform is a subsidiary of African & Overseas Enterprises.

Source: I-Net Bridge

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