Jump in online sales gives pandemic-hit TFG a boost

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TFG said the second wave of infections has caused many of its stores in Australia, New Zealand and UK to close again.
Photo: Gallo Images/OJ Koloti
TFG said the second wave of infections has caused many of its stores in Australia, New Zealand and UK to close again. Photo: Gallo Images/OJ Koloti

Clothing retailer The Foschini Group's headline earnings per share decreased by 80.8% for the year to end March, it said on Thursday.

It also reported an annual operating loss of R718.2 million, down from a profit of R4.7 billion the previous year.

Retail turnover for the year decreased by 6.7% to R33 billion. Excluding the recently-acquired Jet business, retail turnover for the year dropped by 13%.

However, the group's largest segment, TFG Africa, saw its turnover for the full year increase by 1.6%, despite lockdown restrictions. According to TFG, the growth was thanks to a strong recovery in the second half of the year, record online sales, and the inclusion of Jet in the second half – which contributed R2.2 billion in additional turnover.

TFG's total online sales grew by 33% during the year, with the strongest online growth coming from South Africa - which grew by 132%.

TFG said that overall, however, its performance was not only impacted by Covid-19 and outlet closures, but also by the acquisition of certain stores and Jet assets, as well as a R2.7 billion non-cash impairment, after tax, of the carrying values of TFG London's goodwill and intangible assets.

Given ongoing tough economic conditions and the year's growth in online sales, TFG plans to focus on its digital offering.

"Macroeconomic conditions in all territories in which we operate are likely to remain constrained and changing customer needs will continue to disrupt traditional business models and accelerate digitalisation," said TFG CEO, Anthony Thunström.

The group's international businesses took a hit during the year. TFG Australia's retail turnover, which contributed 17.9% to group retail turnover, decreased by 7.1%; while TFG London's retail turnover decreased by 49.7% and contributed 12.7% to group retail turnover.

Cash retail turnover decreased by 0.8% while credit retail turnover, which was purposely restricted by stringent and reduced acceptance criteria, decreased by 23.6%. Cash retail turnover now contributes 78.7% to total group retail turnover.

For the year, the group traded out of 4 284 outlets across 26 countries, while 142 outlets were opened and 366 closed.

The board has resolved not to declare a final dividend. However, the board anticipates resuming dividend payments during the 2022 financial year.

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