Truworths (TRU) – Office and the UK footwear market

With the help of an independent UK-based analyst, we look into the growth prospects of TRU’s UK business, Office. We find the relative market positioning of Office avoids the price pressure from the lower end of the market, but the decline in specialist footwear retailers is concerning. TRU’s goals of growing the in-house brands of Office may be difficult as Office already has an extensive range of private label styles.
We highlight some key obstacles to TRU’s intentions of extending Office’s merchandise to outerwear, and consequently do not expect significant value enhancement from this strategy. TRU may be able to significantly improve the supply chain efficiency of Office’s UK operations, which has a ratio of warehouse to retail space of almost 2:1.