TFG posts strong performance in Australia
Group chief says clothing turnover spearheaded growth as country’s economy predicted to continue growing
email@example.com THE FOSCHINI Group (TFG) yesterday posted a strong performance from its Australian market with group turnover in the six months ended September rising to nearly R16 billion.
Anthony Thunström, the newly appointed chief executive of the clothing and homeware group, said retail turnover jumped 28.6 percent to R15.9bn during the period with the Australian market soaring 170.7 percent.
Thunström said turnover growth in Africa jumped 8.4 percent and was 50.7 percent stronger in TFG London.
He said the group, however, expected headwinds in the future.
“We expect trading conditions to remain challenging in all three of our major territories, as consumer spending and business confidence remain under pressure,” Thunström said.
TFG, which owns Markham, Foschini, American Swiss and Totalsports, entered the Australian market last year when it acquired menswear chain Retail Apparel Group for A$302.5 million (about R3.07bn).
Its competitor Woolworths also built a portfolio in Australia after acquiring David Jones, but has since dumped the brand after posting losses during the 2018 financial year.
TFG said it had to contend with South Africa’s technical recession, high unemployment and a VAT hike, which constrained consumer spending during the period.
Global rating agency Standard & Poor said Britain would suffer rising unemployment and falling household incomes that would trigger a recession should the country fail to secure a deal that would prevent the country from crashing out of the EU.
The Reserve Bank of Australia said this week that the economy of that country was expected to continue to roar this year and next, suggesting gross domestic product will grow by an average 3.5 percent a year above the already-optimistic 3.25 percent growth rate it saw just three months ago.
Thunström said TFG clothing turnover led the growth, jumping 36.1 percent during the period while homeware and furniture grew 7.8 percent.
He said jewellery sales rose 2.7 percent and cosmetics turnover increased 1 percent while group cellphone turnover fell by 2.6 percent.
Thunström, however, said that the group would remain resilient on the back of its diversification strategy and cost control measures.
Headline earnings a share – the main profit measure – grew by 8.3 percent in the six months to September to 506 cents a share, compared with 467.1c a share a year earlier.
TFG declared an interim dividend of 330c a share, 1.5 percent higher than on the previous comparable period.
TFG’s outlets increased to 4 041 shops in 32 countries.
During the past six months, TFG Africa opened 22 outlets and closed 26. TFG London opened 68 stores and closed 73, while TFG Australia opened 22 outlets and closed six.
Thunström said the second half of the group’s financial year, as always, would be highly dependent on Black Friday, Cyber Monday and Christmas trade.
He said TFG London would remain sensitive to the impact of the ongoing department store reorganisation currently playing out in the UK.
TFG shares rose 2.67 percent on the JSE yesterday to close at R170.95.
THE FOSCHINI Group has posted a strong performance from its Australian market with turnover rising to nearly R16bn. African News Agency (ANA)