RETAILING: Encouraging Signs For Foschini
Recent Western Cape Business News
Trading conditions for the first five months of this financial year have been encouraging and above expectation across all the trading formats in Cape Town-based Foschini, with sales increasing by an impressive 17,3% over the corresponding period last year.
Doug Murray, group CEO of TFG told the 74th Annual General Meeting in Parow yesterday that positive consumer sentiment is expected to continue in this financial year, but that the group remained “mindful of the current inflation environment, the potential impact on interest rates and the current fragility of international markets”.
The group, which is one of the largest credit retailers in the country, consists of womens’ and mens’ clothing chains, jewellery, sports apparel, homeware and furniture retail divisions as well as financial services. Among these are Foschini, which comprises Donna-Claire, Fashion Express and Luella chains, exact!, menswear retailer Markham, Jewellery division (American Swiss, Sterns and Matrix stores) and sport retailers, Sportscene, Totalsports and Due South. It also operates @home and @homelivingspace and two financial services divisions, one which supplies credit to its group customers and the other, RCS, in which TFG holds 55%. RCS provides transactional finance, personal loans and private label cards to the general public as well as to other retailers.
Murray told TFG shareholders the sales growth was in part due to the successful implementation of strategic group initiatives such as improved customer relationship marketing (CRM) programmes and tighter supply chain management as well as to improved consumer spending.
“The growth has been consistent across all trading formats with total sales up 17,3% and same store growth 10,5% compared to the same period last year.
“Particularly pleasing is the growth in clothing of 18,7%, while cellphone sales grew by 28,1% and homewares by 15,4%. Jewellery sales increased at a lower rate of 6,2% which is to be expected in the current economic environment.
He said the retail debtors’ book also continued to perform satisfactorily in the current climate and RCS continues to perform well.
He reiterated that in line with the group’s strategy of investing for the long term, the group would continue to open new stores in certain of its formats that were currently under-represented. Its overall trading space was anticipated to increase by approximately 7% in the current year, which augured well for ongoing growth.
Looking ahead, Murray said that the group remains confident that it can again deliver a favourable result for this year, albeit against a very strong second half base and remembering that the second half of the year is heavily dependent on Christmas trading, which will largely determine the performance of the group in the second half.
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