Truworths SA says it has no financial exposure in ...

Truworths SA says it has no financial exposure in ZSE suspended Zim operation

Audrey Galawu

Truworths International has said it is not financially exposed to Truworths Zimbabwe, which has been suspended by the Zimbabwe Stock Exchange for three months after failing to publish its 2023 financial statements.

“The said suspension has been requested by the board of Truworths Zimbabwe and approved by the Securities and Exchange Commission of Zimbabwe. The Group has a 34% shareholding investment in, and non-executive director representation on the board of, Truworths Zimbabwe,” said Truworths International in a statement.

Truworths International said its 34% investment in Truworths Zimbabwe, held since 2002 was acquired at a non-material cost and had been fully impaired by the group in prior years.

The statement further said that group had not made any financial assistance, in the form of loans, guarantees or otherwise, to Truworths Zimbabwe and does not have any operational involvement in the Harare listed company.

The group said the suspension would “provide Truworths Zimbabwe the opportunity to address the going concern aspects of its business, and ensure compliance with listing requirements”...

ZSE suspended from Truworths Zimbabwe’s shares on the stock exchange to give the clothing and apparel retailer a chance to sort out its going concern status over the next three months.

“The Zimbabwe Stock Exchange Limited hereby notifies the investing public of the voluntary suspension from trading in shares of Truworths Limited with effect from 7 March 2024,” ZSE CEO Justin Bgoni announced.

Truworths Zimbabwe has said it expects the outlook period to be “uncertain, unstable” and complex, especially after the suspension of its shares from the ZSE.

Truworths Zimbabwe said in spite of the challenges from currency volatility and unfair competition from the informal sector, the company remains “hopeful that currency reforms will lead to stability and improved liquidity” on the market.

Truworths Zimbabwe saw a sharp fall in clients after it stopped credit sales in July 2022 “due to the increase in the prime interest rate to 200% per annum which made credit sales unviable” for the business.

Truworths Zimbabwe which has closed at least six branches around the country, resumed credit sales in February 2023, but only for USD accounts.

Formal retailers including OK Zimbabwe and distressed Metro Peech Wholesalers have raised alarm over viability in the face of informal traders flooding all spaces.

Finance Ministry Permanent Secretary George Guvamatanga has however dismissed their appeals, telling them to innovate rather than seek policies that are punitive to small players.