adminCLOTHING retailer Truworths’ turnover for October grew 19 percent following the introduction of the Cabs-funded credit card in the same month Truworths launched a Cabs-funded In-store Credit Card — the first of its kind in the country — for exclusive use in the Truworths/Topics Stores in a bid to boost its revenue and improve its balance sheet liquidity.
The initial phase of the credit card would be limited to a funding of US$5 million with a few selected customers — 5 000-6 000 — expected to participate in the scheme.
The 36-month facility not only makes it affordable to get credit, but it will reduce the interest payable bill on the accounts.
Chief executive Mr Temba Ndebele told the AGM yesterday that with the introduction of the credit line, the group expects further upside in terms in terms of sales.
It would result in improved purchasing power for customers, more affordable instalments and improved cash flows for the business.
However, the growth of the in-store credit card will be influenced by liquidity in the economy.
Turnover in the first four months to October 13 was up 5,9 percent.
The Earnings Before Interest Taxation Depreciation and Armotisation margin was at 14,7 percent from 13,3 percent.
Mr Ndebele said the year will be defined going into the big season. He added that the busy season will probably start late as most workers will receive their bonuses late.
The mainstay of Truworths has been its ability to offer extended credit terms on goods which are of superior quality to the boutiques.
There is really no need to go for the cash and carry boutiques when you can buy a better quality garment for almost the same amount of money and pay over six months.
Obviously the innovation around the In-store credit card which is being underwritten by a “blue chip” financial institution will propel the topline.
Aren’t all those bankers looking forward to paying US$10 per month towards the suit as opposed to US$50 per month for the car boot variant! They should fit the bill they have the credit history and a reputation to protect. — FinX
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