Woolworths Holdings’ credit rating downgraded
|Published
FILE PHOTO: A woman walks past an outlet of retailer Woolworths in Cape Town FILE PHOTO: A woman walks past an outlet of retailer Woolworths in Cape Town
JOHANNESBURG - Standard & Poor’s Global Ratings downgraded Woolworths Holdings’ credit rating from Wednesday from `zaA+´ to `zaA-´ on a long term national scale basis, due to the effects of COVID-19 and South Africa’s previous sovereign ratings downgrades, a statement said Thursday.
The rating however still gives Woolworths a “strong” credit rating on its bonds.
The group said earlier this month the impact of the COVID-19 virus was being felt across all markets in which it operates, and it warned that
applicable laws and regulation, decline in foot traffic and consequent loss of trade were likely to have a big impact on its earnings and cashflow in the second half of our financial year ending June 2020.
To mitigate some of these effects, there was a focus on growing online trade, reducing costs, and managing inventory and working capital, while capital expenditure had been cut, with only critical projects moving forward.
Suppliers of apparel and landlords were being engaged to reduce product intake and extend payment terms respectively, while the executive team had also decided to forego up to 30 percent of their fees and salaries over the next three months.
Woolworths said yesterday that they will be expanding its shopping options to customers through its new contactless, Click and Collect drive-through stores.
Woolies shoppers will have the option to do their grocery shopping, without having to leave the comfort and safety of their cars.
Launched last week as a trial at the Durbanville Food Store, Click & Collect offers Woolies’ customers another quick and convenient option for grocery shopping.