TFG cashes in

Parow-headquar­tered fashion retailer The Foschini Group (TFG) is making re­markable progress in its strategy to drive its cash-based sales. The most compel­ling evidence of a plan working is that TFG’s Rewards pro­gram now boasts cash reward customers of more than 3,6 million. In the financial year to end March TFG’s cash sales grew almost 20% compared with 16% in the previous financial year.

TFG – which owns popular fashion chains Foschini, Markhams and Totalsports – has traditionally been viewed as a credit re­tailer. Its ‘neighbour’ Pepkor – also based on Parow – has always set the high level mark for cash based sales in the fashion retailing seg­ment. Although TFG is unlikely to challenge Pepkor’s position, its cash sales as a per­centage of total sales reached a commend­able 45.6% from 42.2% in the previous year whilst cash sales for the group.

TFG CEO Doug Murray said that on an annualised basis, cash sales as a per­centage of total sales would have increased to approximately 54% if the recently acquired Phase Eight chain in the UK was included. It seems like cash sales momentum is building with Mur­ray noting stronger cash sales growth in the second half of the financial year. He said this reflected the ongoing appeal of TFG’s merchandise to customers.

Overall TFG pro­duced a solid result for the year with combined retail sales growth of close to 14% – which is well ahead of infla­tion. Murray said the group continued to grow trading space by opening 195 stores for the full year in South Africa and the rest of Africa (with 26 stores closed.)

He added that TFG recently launched its online trading plat­form with two of its brands TFG Mobile and @home – not­ing their performance to date had been en­couraging and in line with management’s expectations.

He continued by saying TFG would also open more than 160 new stores in 2016 in South Af­rica and Africa as well as launch an e-commerce platform for sportswear and outdoor retailers To­talsports, Sportscene and Duesouth this month. Other plans in­cluded the launching of the “tweens” brand in August.

He said sales into the first six weeks of the new financial year – excluding Phase Eight – were at simi­lar levels to the past financial year. But he did note that in recent weeks’ sales were lower due to unseasonably warm winter weather. Murray also raised concerns around the potential ongoing im­pact that loadshedding was likely to have on TFG’s business.

“However, we an­ticipate continuing to benefit from good cash sales growth.”

By Jenni McCann