Truworths International, the South African owner of UK footwear chain Office, has booked impairment charges of up to GBP131m related to the challenges the brand has faced to trading in the midst of the coronavirus pandemic and the liquidity of the unit.
The group had warned it was looking at an impairment charge for Office when it updated on its full-year results last month.
For the 52 weeks ended 28 June, Truworths said revenue for Office fell 17.4% year-on-year to GBP230m (US$289m).
Earlier this year the group, which sells clothes, shoes, jewellery and homeware, confirmed it was exploring all options for the footwear chain after group revenues were materially reduced since stores were forced to shut and that it was “actively engaged” in executing operational steps and various strategic responses to best mitigate the impacts of this “unprecedented and continuously evolving situation.”
In addition to the Covid-19 impact, Office has been compounded by uncertainty over Britain’s departure from the European Union and by the collapse of department store House of Fraser, where Office had several concessions.
Last July, Truworths said it had entered into debt restructuring talks with lenders to explore options for the business. Around the same time, it was reportedly mulling the closure of 15 of its 139 stores over the next two years.