Woolworths: Blurry plans may just be coming into focus
Judged by its latest results, Woolies is not yet in the clear. It has made blapses, but seems to be fixing them
Woolworths CEO Ian Moir has admitted the grocery and clothing retailer made mistakes, especially when it came to adapting to a market that was more price sensitive.
This could be seen in the first quarter of this financial year, when SA clothing sales fell in real terms. Moir said the group has been working hard to turn this around, and its efforts are now paying off.
This could be seen in the fashion, beauty and home division, which recorded “positive growth” in the second quarter, said Moir. The company has maintained its performance since then, with sales for the first two months of 2019 rising 5%.
Besides the improved performance from that operation, Moir said the heavy lifting regarding the turnaround at its Australian chain, David Jones, was practically done.
In 2018 Woolworths surprised everyone when it wrote off R7bn in the value of struggling David Jones. Earlier this month it had to deal with the sudden resignation of David Jones’s CEO David Thomas and the abrupt departure of two Australian non-executives from the Woolworths board. Though Moir admitted their departures did not look good, he said David Jones was set to recover this year. Once the renovations at its flagship Elizabeth Street store in Sydney were complete, the group would benefit from about A$300m in cost savings and recovered sales, he said.
Judged by its latest results, Woolies is not yet out of the woods. Even so, it could be worse.