S.African retailers' sales still under pressure

By Phakamisa Ndzamela

JOHANNESBURG (Reuters) - South African clothing retailers Truworths and Foschini warned of tough trading conditions ahead after releasing slow sales figures, as the country's recession continued to hit the sector.

South Africa's biggest clothing retailer Truworths said 18-week sales from June 29 to November 1 rose by 10 percent to 2.3 billion rand.

The company said on Thursday trading would be tough for the current financial year as consumers cut spending despite a series of interest rate cuts from the central bank.

The group said comparable sales grew by two percent.

Competitor Foschini reported an increase of 1.8 percent to 231.9 cents in diluted headline earnings per share for the six months to end September and also cautioned the first five weeks of its second half had been tough.

Foschini's retail turnover was up 7.9 percent to 4.1 billion rand, while retail turnover for the first 5-weeks of the second-half rose 4.8 percent in tough trading. Comparable store turnover rose 1.2 percent.

Truworths shares fell over 2 percent after the firm issued the trading update and closed 1.77 percent lower at 41.60 rand. Foschini shares closed 3.6 percent lower at 56.58 rand, compared to a 2.41 percent weaker JSE retail index

"Both of these numbers confirm that we are not yet seeing a consumer that is willing to spend yet. If anything, in the mass middle market, things are still very tough and that's where the bulk of the retailers operate," one Johannesburg-based retail analyst said.