Truworths (TRU) – Waiting for the rebound

Using the retailers granular trading updates over the past year, we identify differences in the rates of recovery. TRU SA’s outperformance of WHL is surprising considering its credit-dependent retail model. A comparison to the UK footwear retailer Schuh reveals significant differences in strategy, and we think Office’s substantial store reduction plan could lead to market share losses and also impact other areas such as own-brand product. Office’s higher-margin own-brand product has declined considerably since the TRU acquisition, and while management plans to reinvigorate this category, recent shopping patterns during the pandemic suggest online shoppers may be less inclined to buy own-brand footwear at Office.