This South African retailer is going on a massive employment drive as it targets new businesses and 350 new stores

TFG (The Foschini Group) says it will ramp up Capex spending in the coming financial year as it steps up its pursuit of growth opportunities to a new scale after posting a record turnover of R43.4 billion for its financial year ended March 2022.

The group reported a gross profit of R21.0 billion (up 40.3%) and headline earnings of R3.3 billion (up 442%) for its financial year to 31 March 2022. Headline earnings per share and basic earnings per share increased by 409.9% and 246.9% respectively.

TFG offers a portfolio of 18 retail brands that include clothing, footwear, jewellery, sportswear, mobile phones, technology products and home stores. The group’s directors declared a final gross cash dividend of 330 cents per share.

The group said it will build 10 new manufacturing business units in the coming year, as well as commit more than R600 million towards opening in excess of 350 new stores.

“The investment in increased manufacturing capacity will more than double employment opportunities in the group’s own factories and strategic non-owned cut-make-trim (CMTs) factories from 5,200 in FY22 to 11,200 by FY26.”

A R2.1 billion Capex commitment for FY23 continues the group’s strategic investments to further strengthen its differentiated business model and mitigate disruptions to global supply chains, it said.

“We have opened 274 new stores in South Africa, completed 96 relocations and enlargements, rebuilt or restored 176 looted stores as well as opened 41 new stores in Australia and 8 new stores in London,” said TFG CEO Anthony Thunström. “That’s 2.4 stores a day over the past year! Additionally, we’re making significant investments in expanding our manufacturing capacity.”

Omni-channel

TFG said it achieved double-digit growth in e-commerce turnover across all territories, recording an 18% increase in online sales in Africa, 13.8% in the UK and 26.9% in Australia, extending the trend towards online shopping experienced during lockdown as

“TFG has made solid progress in our goal to create the most remarkable omni-channel experience for our customers, with the acquisitions of leading app developer Flat Circle and last-mile delivery service Quench, as we pave the way for the upcoming launch of our new integrated omni-channel platform that leverages group scale to bring all TFG brands together, along with third-party vendors,” said Thunström.

“This will create a home for all of our brands and other businesses that want to leverage TFG’s scale, bringing over 200 of the world’s best brands and more than 2,000 new styles a week onto one platform to provide an unrivalled selection across fashion and lifestyle goods.”

The chief executive said that group investment in TFG Labs is producing a step-change in critical performance areas, with a 19% reduction in cost per order, 50% improvement in last-mile on-time deliveries and 10% drop in average order turnaround times.”

The group said it  has rapidly built “a top digital team”, including more than 85 high calibre new hires – previously only possible outside of ‘corporate’.

“The superior growth achieved in all our operating territories and solid progress on key strategic objectives leaves TFG very well positioned for further organic and inorganic growth, supported by a strong group balance sheet,” said Thunström.

He said that in a country facing devastating levels of unemployment, TFG added 7,176 jobs and workplace opportunities in the reporting period.

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