The Fos­chini Group posts strong growth in Aus­tralia |

Group chief says cloth­ing turnover spear­headed growth as coun­try’s econ­omy pre­dicted to con­tinue grow­ing

Pretoria News - - BUSINESS REPORT - DI­NEO FAKU di­

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.

| AR­MAND HOUGH African News Agency (ANA)

THE FOS­CHINI Group has posted a strong per­for­mance from its Aus­tralian mar­ket with turnover ris­ing to nearly R16bn.

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