The South African retailer Truworths will provide a £6.5 million (€7.3m-$8.6m) secured revolving credit facility to its British footwear unit Office as part of a rescue package. It noted that the funds will come from existing group cash reserves and will be distributed in a phased manner over the next 15 months.
In the wake of the Covid-19 pandemic, Truworths is restructuring Office, a move that will involve job cuts and the closure of about half the retailer’s stores. The British business had been already hit by Brexit and low consumer spending.
Truworths stressed that Office’s store portfolio “remains a key focus point” and that its management continues to renegotiate leases with landlords. It added that loss-making and marginal stores will be closed as leases run out. Office has 129 stores. Some 28 stores are scheduled to be closed during Truworths’ 2021 financial year, which ends in June, and an additional 30 will be shuttered by June 2024.
To underpin gross profit margins at Office, the group plans to grow its private label shoe brands, which currently represent around 10 percent of the U.K. retailer’s business.
In the meantime, Truworths is planning the succession of its chief executive, Michael Mark, after nearly three decades in charge. Mark joined the company in 1988 and became CEO in 1991. Mark was due to resign in 2015, but his successor, Jean-Christophe Garbino, quit after less than a year in the job.