Cash­ing in on di­ver­sity


THE DI­VER­SI­FIED Fos­chini Group, with mer­chan­dise cat­e­gories in­clud­ing cloth­ing, jewellery, cos­met­ics, home­ware and fur­ni­ture, pro­duced its high­est ever prof­its and re­alised fur­ther gains in mar­ket share for the year ended 31 March 2013. The re­tailer in­creased its trad­ing reach, open­ing a fur­ther 146 stores to bring its num­ber of out­lets to 1 979 in­clud­ing those in Namibia, Botswana, Le­sotho, Zam­bia, Swazi­land and Nige­ria. It will also ex­pand into Mozam­bique, An­gola and Ghana.

But mind the debt trap. The counter’s re­tail debtors book in­creased by 14% to R5.2bn while the ac­tive ac­count base grew by 6.0% to 2.6m ac­counts and fur­ther, its net bad debt as a per­cent­age of clos­ing debtors book in­creased to 10.5% from 9.4% in the pre­vi­ous year, mov­ing from 10.3% at the half-year. How­ever, the group’s man­age­ment says this re­mains well within its ex­pec­ta­tions.

With a long-term in­vest­ment view, it would be more than rea­son­able to ex­pect fur­ther up­side from this play.

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