CLOTHING retailer, Truworths Limited has closed six shops due to underperformance which has increased the likelihood of retrenchments, NewsDay Business has learnt.This comes as the local textile and clothing retail chain faces stiff competition from cheaply imported materials and second-hand clothes which have flooded the streets.
Speaking to NewsDay Business, Truworths Limited chief executive officer Bekithemba Ndebele confirmed that the closures were linked to cheaply imported materials and second-hand clothes.
“On the issue of closing, there are shops that were underperforming and we closed those as they were not productive,” he said.“The stores that we closed on the 9th and are in Mutare, Masvingo, Bindura and Mt Darwin ... and the reason behind it is because of the business dynamics in this country.”
He said the company could no longer keep open shops which were underperforming and less productive owing to the challenges the textile industry faces.“Underperformance contributes to closure of the store as one will not be able to pay rentals for that shop meaning that we need to scale down and avoid loss and this is also caused by the economy of this country,” Ndebele said.
Of the six closed shops, three are Topics shops in Bindura, Mutare and Masvingo as well as two Number 1 outlets in Mutare and Mt Darwin, and one Truworths Ladies in Masvingo.Since Truworths Limited started to face challenges from cheap imported material, second-hand clothing and foreign currency pricing distortions, to date, the firm now has six
Truworths Ladies outlets, Truworths Men (six), Topics (14) and Number 1 (12).In total, Truworths Limited now has 38 stores from a peak of over 50.
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The closure of the six stores has affected employees and has also increased the possibility of retrenchment, according to workers who spoke to this publication.One of Truworths Limited workers, who spoke on condition of anonymity, said they had gone for months without pay, which had affected their capacity to continue working.
However, Ndebele said this was incorrect because workers were being paid according to the National Employment Council conditions, adding that while arrears on salaries occurred, employees were being paid.
The firm has faced challenges paying salaries affected workers working at shops that were not making good sales or not raising enough money to pay rent.“Workers here understand these issues. We have council workers meeting here monthly to discuss these issues. The problem is that some of the people if they fail to do their work, they engage in the blame game. We pay workers according to their productivity,” Ndebele noted.
Back in July 2022, restrictive pricing around the widening gap between the official and parallel forex rates led to the firm closing three of its outlets in Harare central business district.
This challenge has also seen decreasing productivity at Truworths Limited outlets.Many shops in the clothing sector have been closing shop mainly due to economic pressures as well as the informal sector which is selling clothes in front of them, blocking potential buyers from walking in.