TFG expects internet sales hike
TFG expects to see a rising contribution from online sales — which now account for 6% of groupwide turnover — as it invests in its e-commerce operations, says CEO Doug Murray.
TFG expects to see a rising contribution from online sales — which now account for 6% of group-wide turnover — as it invests in its e-commerce operations, says CEO Doug Murray.
“The UK is just over 28% [online sales], Australia is a bit less because it’s only been included for two months, but their online sales are about 2.5% of what they do, and in SA, we’re edging up to 1%,” Murray said.
“Considering that America is around 8.5%, we’re going in the right direction and we’ve got a lot of focus on that in terms of investments in all territories.”
The 6% contribution from online sales would “definitely” grow, Murray said.
The clothing retail company reported that turnover in the six months to end-September rose 9.2%, or 12.6% on constant currency terms, to R12.5bn. Headline earnings grew 5.6% to R1.1bn, excluding costs related to the acquisition of Australian company Retail Apparel Group.
Credit turnover growth rose to 6.2%, which was “in line with expectations, as the negative impact of the affordability regulations is now in the base”.
TFG, Truworths and Mr Price took the Department of Trade and Industry and the national credit regulator to court in August over the affordability regulations. The retailers have argued that the rules, which require credit providers to validate customers’ income, are forcing them to deny credit for many shoppers.
TFG said the rules “have had and will continue to have a negative impact on the group’s credit turnover”.
“A lot of things that went on in that court case we see positives from, but we await the ruling,” Murray said.
The national credit regulator is also probing TFG for allegedly charging a club fee on its credit agreements. TFG believed that the regulator had an incorrect view on club fees, Murray said. “We’ve got several senior counsel opinions that make us very confident on that. We feel that we are totally compliant there.”