Major South African retailer in serious trouble

Truworths is set to report flat to muted earnings growth for the first half of its 2026 financial year, as the apparel retailer’s performance in its home market continues to struggle.

Despite a stronger performance in its UK business and online sales, Truworths’ Africa business struggled in the last few months of 2025.

This reflects a continued trend of decline for the retailer, which has struggled over the past few years in a depressed consumer environment.

Founded in 1917, Truworths is one of the country’s oldest retailers, known for brands like Daniel Hechter, Uzzi, Ginger Mary, Naartjie, and LTD Kids.

The retailer has operations in South Africa and other African countries, housed in its Truworths Africa division, and also has a business in the United Kingdom, Office UK.

On Thursday, 22 January, after market close, Truworths released a business update and voluntary trading statement outlining its performance for the 26 weeks ended 28 December 2025.

This 26-week period marked the first half of Truworths’ 2026 financial year, which is not off to a strong start.

Office UK performed well, with 6.4% sales growth to £191.9 million, boosted by Truworths’ ongoing store development and remodelling programme. 

In rand terms, this division’s retail sales increased by 7.1% to R4.5 billion, driven by a 7.5% jump in online sales, which now makes up nearly half of the segment’s retail sales at 45.7%.

However, the retailer noted that the UK’s low economic growth, a softening labour market and subdued consumer confidence continued to weigh negatively on consumer spending.

The remodelling programme will continue into the second half of the 2026 financial year, and is expected to increase trading space in this segment by between 10% to 12%.

The Truworths Africa segment, which is almost double the size of the UK business in terms of sales, did not perform as well.

Truworths Africa’s retail sales decreased by 3.6% to R8 billion, with both account sales and cash sales down.

Online sales in this division delivered strong growth of 23.3% and contributed 7.4% to total retail sales.

The retailer noted that the number of active accounts in this segment increased by 0.6% over the 26-week period. 

It said active account holders able to purchase fell slightly to 82% while overdue balances to gross trade receivables ticked up marginally to 13%.

This comes after Truworths Africa took a moderate approach to credit book expansion during the 2025 financial year, particularly within higher-risk segments.

Now, the company said this more conservative strategy has created capacity to “prudently assume incremental risk”. 

“Nonetheless, the group maintains the view that operating conditions will remain challenging, and accordingly, it continues to pursue a measured approach to credit expansion,” it said.

Truworths Africa saw very muted growth in trading space over the period, increasing by 1% over the 26-week period.

Overall, Truworths expects to report similar or marginally higher earnings growth for the first half of its 2026 financial year, with at most a 2% increase in earnings per share and headline earnings per share.

Truworths’ interim results are scheduled for release on or about Thursday, 26 February 2026.

The table below shows Truworths’ expected earnings for the first half of its 2026 financial year.