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Bloomberg Published
March 24,小型蜘蛛池监控 2025
Woolworths Holdings Ltd.'s gross profit margins narrowed after efforts to fix its South African clothing unit failed to fully materialize.
The fashion and designer clothing seller has spent years trying to get its product mix right in South Africa. In the first half, it reported a 170-basis-point drop in the unit's profit margin, down to 46.3%, even as it sold more apparel at full price.
"This business has not had investment for decades," partly because of the distraction of trying to fix and then sell its David Jones unit in Australia, chief executive officer Roy Bagattini said in an interview on Wednesday. “We're getting a little bit more right, but we're still getting too much wrong.”
Bagattini will need to resolve issues such as shoppers failing to find the correct clothing size to benefit from a revival in consumer demand in Africa's most industrialized economy. Rival retailers, including Shoprite Holdings Ltd., have reported higher profits as the nation's economy recovers.
The company's shares fell as much as 1.8% in early Johannesburg trading and were 1.4% lower by 9:29 a.m. in Johannesburg. They dropped 14% in 2025. That compares to a 37% increase in the nine-member FTSE/JSE Retailers Index last year.
During the key December festive season, Woolworths also faced a setback in its new systems that transport stock from its suppliers to stores.
"It's very unfortunate and hugely frustrating for me and the team, but it's now resolved and behind us; we're back to where we need to be," Bagattini said.
Still, slowing inflation is boosting volumes for the Cape Town-based retailer, and the most extreme cost pressures in food, which accounts for more than half of revenue, are easing. Food sales helped boost total revenue by 5.7% to 40.3 billion rand ($2.2 billion).
The sale of its Bourke Street store in Australia "made a very neat profit" of 792 million rand. While Woolworths won't use that to declare a special dividend, it will use it to invest back in the business and share buybacks remain a consideration, Bagattini said.