Fashion retailer Truworths says competition from Shein and Temu — the online value clothing retailers based in China who sell directly to consumers in SA — together with increasing competition from online and traditional retailers, are the biggest risks facing the business.
In its 2024 annual report the group said it was investing in fashion intelligence capability through the in-house fashion studio to identify relevant fashion trends to counter the threats, and would also invest in its own brands.
The company also said it will focus on merchandise categories where Truworths is under-represented to grow market share.
Shein and Temu top banking group Capitec’s list of most preferred online purchases, a good indicator of the brands’ popularity because the bank has a sample size of more than 23-million clients.
The two Chinese giants are fighting for dominance around the world. Shein, known for its rapid production of fashion-forward, affordable clothing, filed a new lawsuit against Temu last month.
The suit, filed in a Washington federal court, accuses Temu of stealing designs, copying product images and fraudulent activities to undercut Shein’s market position.
The complaint alleges that Temu, a platform owned by Chinese e-commerce giant PDD Holdings, has subsidised its low prices by encouraging sellers to offer counterfeit items, stolen designs and substandard products.
These allegations aren’t new. Shein and Temu have previously sued each other in US courts over similar claims, but the latest lawsuit ratchets up their feud.
Truworths’ remuneration report shows its CEO earned R55.5m in the 2024 financial year, down from the R70m in the prior year.
CEO pay in the retail sector has come under scrutiny. A report last month by shareholder activist group Just Share found the average CEO in the retail and wholesale sector earns 597 times that of the lowest-paid worker.
The analysis, conducted across 10 JSE-listed companies, highlights the wage inequality between CEOs and the lowest-paid workers, as well as progress in board and management diversity.
The report looked at Shoprite, Pick n Pay, Pepkor, TFG, Woolworths, Mr Price, Dis-Chem, Clicks, Truworths and Spar. It says these companies collectively employ nearly 390,000 full-time employees and generate a combined annual revenue of R833.7bn.
The average lowest paid worker in the wholesale and retail sector would need to work for 21 months to earn what an average CEO in the sector earns in one day, Just Share said.
In his letter to shareholders Truworths chair Hilton Saven said the remuneration reporting and disclosure landscape in SA will undergo material change after the recent signing into law of the Companies Amendment Act.
“The new requirements will include pay-gap disclosures, binding remuneration policy and remuneration report votes at the AGM, and the requirement in circumstances where the remuneration report is not approved for the members of the remuneration committee to stand for re-election,” he said.
“While the implementation date of the legislation has not been determined, it is expected to be effective for the group’s 2025 financial reporting period and our remuneration reporting practices will be aligned to ensure compliance with the legislation.”
The recent amendments to SA’s Companies Act, signed into law by President Cyril Ramaphosa, are poised to transform corporate governance through increased transparency and accountability, though not without potential challenges.
Experts have warned the changes may not fully address salary equity issues and could lead to unintended consequences for the workforce.
The amended act introduced changes to remuneration disclosure for both private and public companies. Key among these is the requirement for companies to list remuneration details for directors and officers by name in their annual financial statements.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.