Truworths trade volumes for the year ended 9 July 2017 went down by 29 percent despite the company recording an increase in the uptake of its 12 months scheme, 263Chat can reveal.
According to Group chairperson, Christopher Peech, trade receivables increased due to more customers opting for the 12 month scheme with the number of accounts increasing by 35 percent to 76.6 percent.
"Trade receivables increased by 15.4% due to more customers opting for the 12 month scheme.
"The number of accounts opting for the 12 month scheme increased by 35.4%, compared to the prior period, resulting in a 76.7% increase in the 12 month scheme values.
"In line with the deteriorating economic conditions, net bad debt was higher than the prior year with write offs increasing by 121.4% and recoveries reducing by 61.7%. All write offs had been adequately provided for.
"The allowance for doubtful debts as a percentage of gross trade receivables increased to 9.4% (2016: 8.9%). In monetary terms the doubtful debt allowance increased by 21.8%.
"At period end 66.9% (2016: 65.7%) of the group's account holders were able to make purchases," he said.
He added that trading expenses before trade receivable costs for the period under review decreased.
"The gross profit margin decreased to 40.2% (2016: 44.4%) as product was discounted to stimulate sales in the first half of the financial year.
"Trading expenses before trade receivable costs decreased by 16.6%. The operating loss margin widened from (7.8%) in the prior year to (19.4%),"said Peech.