Truworths 18-wk sales up, sees tough 2010

By Phakamisa Ndzamela

JOHANNESBURG (Reuters) - South Africa's biggest clothing retailer Truworths International Ltd posted a rise in sales on Thursday, but said trading conditions would remain tough in 2010 as consumers reign in spending.

Truworths said group retail sales in the 18 weeks from June 29 to November 1 rose 10 percent to 2.3 billion rand, while comparable (same store) retail sales grew by 2 percent.

Shares in the company fell more than 2 percent after the statement but recovered to trade just 0.8 percent lower at 42 rand by 0951 GMT, performing better than a 1.5 percent weaker retail sector index.

"On the clothing side they are amazing when it comes to reading fashion trends. It tells you in a very difficult economic environment they are still getting it all right," said Abri Du Plessis, a retail analyst at Gryphon Asset Management.

"It's a good result in current circumstances ... I think Truworths are definitely taking some market share from Woolies (Woolworths)."

Truworths, which rivals Foschini, Woolworths and unlisted Edcon, said it increased trading space by 9 percent, while its debtor's book (showing its credit to retail customers) inched up 11 percent to 2.6 billion rand.

Foschini, which is expected to report interim results later on Thursday, was trading down 2 percent at 57.50 rand.

It posted an 8 percent rise in sales for the first five months of its fiscal year in September, and Du Plessis said he expected headline earnings per share to be about 9 percent up.