JSE-listed clothing retailer the Foschini Group [JSE:TFG] announced a 14.1% increase in cash sales in its South African operations in the first 21 weeks of 2020, while sales on credit only rose 0.9%.
In a statement at the group's Annual General Meeting on Tuesday, CEO Anthony Thunstrom said this reflected the group's "prudent approach to credit extension" in light of SA's constrained economic environment and the promulgation of new debt relief laws. President Cyril Ramaphosa signed the National Credit Amendment Bill was signed into law in mid-August.
"This approach does however entail an opportunity cost both in terms of additional turnover growth that has been forgone as well as potential credit income that is not being generated," said Thunstrom.
The group's SA operations, which include Markham, Foschini, @Home, Totalsports and donna, account for just under two-thirds of its global turnover.
Total group turnover grew 8.1% for the first 21 weeks of the current financial year.
Its gross profit margin rose to 53.6%, up from 52.5% at March 2018, and headline earnings rose 12%. In early afternoon trading, its share price was up almost 8% to R160.38.
Thunstrom said the group's UK operations, which account for roughly 22% of total turnover, remained subdued in the first 21 weeks of 2020, with "continued footfall decline in shopping centres and on the high street, continuing online migration and ongoing Brexit uncertainty". Trading conditions in Australia remain satisfactory, he said.