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If you went to a Woolies during a lockdown you'd be forgiven if you thought they were thriving. Unfortunately for Woolies, most of their sales (and profits) come from clothing. This was confirmed in their latest trading update.
The update covered the first nine weeks of the year (before lockdown) which saw overall sales increase 2%. The following eight weeks ending 26 April saw overall sales drop 18.8%. During lockdown food sales increased 17.4% but clothing sales dropped over 60% in SA.
The case studies developing over this period will be incredibly interesting. Essential winter clothing was back on sale a few weeks back, did people pile up? As of 1 June the clothing stores will be fully operational. Unfortunately there is less money going around so luxury purchases like Country Road may take some strain.
Sales at David Jones (Australia) dropped 35.8% during their lockdown. That lockdown has been eased and things should normalise pretty quickly there. An entire review of the capital structures in Australia is taking place. That business really has gone from one set back to the next.
There will be another trading update in July and the results in August. We will watch closely.
