TFG bucks retail trend over festive season
Apparel group outperforms rivals with robust sales
Apparel group TFG, which operates the Foshini, American Swiss and Markham chains, has bucked the retail trend and produced solid growth numbers for the festive season.
While other retailers such as Woolworths, Mr Price and Truworths had flat figures in the leadup to Christmas, TFG notched up robust sales in all operations.
TFG said overall turnover rose 8.3% for December 2018. Woolworths, Mr Price and Truworths experienced low single-digit growth.
Simon Brown, a former stockbroker and founder of financial education company Just One Lap, puts the solid performance of the group down to its management.
“It’s well-known in the retail sector that they have the best management team. They always perform,” he said.
TFG’s latest rise in sales follows the 8.4% jump in sales to R10.45bn for the six months to September 2018 and profit before tax of R1.01bn, up from R972m. In its full-year results to March 2018, sales grew 21.4% to R28.8bn and profit before tax grew from R3.2bn to R3.38bn.
Brown said judging by TFG’s December sales, customers were out shopping but it looked like they preferred going to its stores, rather than those of its competitors. Sales from TFG Africa, which houses its SA operations, were up 9.5%.
Brown said it looks like the retailer managed to attract customers to its stores by getting its product and pricing mix right.
Besides its local operations, TFG’s UK and Australian chains also performed well. Measured in sterling, sales for TFG London was up 4.7% and TFG Australia grew 16.5% in Australian dollars.
Brown said this is impressive because SA companies do not have much of a record regarding making a success of its acquisitions in the UK and Australia.
TFG went into Australia in the past financial year when it bought Retail Apparel Group for R2.94bn. In the same period it also bought Phase Eight, Whistles and Hobbs in the UK for an undisclosed sum.
The group said its consolidated sales for the nine months to December 29 were up 22.7%.
It said this growth was underpinned by strong "Black Friday” trade, as well as strong December trade across all its operations.
TFG said that Black Friday is starting to have a more pronounced effect on its businesses.
“The impact of Black Friday, in pulling forward what would have traditionally been December sales, is becoming more pronounced, especially in certain merchandise categories such as cosmetics and jewellery.”