{"id":840472,"date":"2025-10-21T12:30:00","date_gmt":"2025-10-21T10:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=840472"},"modified":"2025-10-21T12:10:30","modified_gmt":"2025-10-21T10:10:30","slug":"trouble-for-one-of-south-africas-largest-retailers","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/840472\/trouble-for-one-of-south-africas-largest-retailers\/","title":{"rendered":"Trouble for one of South Africa\u2019s largest retailers"},"content":{"rendered":"\n

The Foschini Group is expecting a large drop in earnings amid challenging consumer environments in South Africa, the UK and Australia. <\/p>\n\n\n\n

In a trading statement for the six months ended 30 September 2025, group sales grew by 12.7% to R29.2 billion (3.5% excluding the recently acquired UK-based White Stuff). <\/p>\n\n\n\n

Group online sales grew by 55.3%, contributing 14.7% of total retail sales, including White Stuff. TFG African Online sales grew by 40.2% driven by its Bash platform. <\/p>\n\n\n\n

However, the group\u2019s operating leverage across the group arises from subdued sales growth, gross margin contraction and the increase in group finance costs of 14.5% resulting from financing the White Stuff deal. <\/p>\n\n\n\n

The group was also impacted by accounting changes for lease charges related to new stores and lease renewals.<\/p>\n\n\n\n

As a result, it is expecting basic earnings and headline earnings to drop by between 20% and 25% for the period.<\/p>\n\n\n\n

In TFG Africa, consumer sentiment and discretionary spending in South Africa remain subdued for longer than expected despite moderating inflation and recent interest rate cuts. <\/p>\n\n\n\n

The South African economy softened significantly towards the end of the period, with GDP growth of around 0.8% year to date. <\/p>\n\n\n\n

Sales for the period grew 5.3%, although sales recovered from July to early-September after a difficult June, changes in customer activity and the timing of school holidays sales saw shift to October. <\/p>\n\n\n\n

Credit sales grew by 7.9%, even if the acceptance rates for new accounts decreased by 0.7% to 19.6%. <\/p>\n\n\n\n

The debtors’ book also grew by 8.0% to R9.0 billion (H1 FY2025: R8.3 billion), with the group stating that the quality of the book is in line with the prior period. <\/p>\n\n\n\n

Its markdown from winter clearance activity impacted gross margins by 100 basis points before recovering by a net 90 basis points, marking a contraction by the end of the period. <\/p>\n\n\n\n

\u201cDespite good operational cost control, (TFG Africa’s) negative operating leverage from the subdued trading environment resulted in a decline in segmental EBIT of 9.7%,\u201d said the group. <\/p>\n\n\n\n

UK and Australia struggles <\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

TFG London saw total sales increase by 69.9% in GDP following the addition of White Stuff to its portfolio. <\/p>\n\n\n\n

However, excluding White Stuff, sales grew by 0.7% as a weak UK economy impacted trade.\u00a0<\/p>\n\n\n\n

White Stuff was a strong performer, with sales growing 12.5% for the period. With the inclusion of White Stuff, TFG London EBIT grew 9.1%.\u00a0<\/p>\n\n\n\n

However, EBIT excludes finance costs, which doubled to GBP4.0 million due to the White Stuff acquisition in October 2024.<\/p>\n\n\n\n

In Australia, discretionary spending remained subdued, even if sales consistently improved throughout the period. <\/p>\n\n\n\n

That said, the 1.6% growth in AUD in Q2 could not offset the 2.8% contraction in Q1, with sales contracting by 0.5% over the period. <\/p>\n\n\n\n

Due to expenses growing ahead of sales, driven by costs from new stores and continued inflationary pressure on expenses, segmental EBIT declined by 18.4%.<\/p>\n\n\n\n

Metric<\/strong><\/td>H1 FY2026<\/strong><\/td>H1 FY2025<\/strong><\/td>Growth<\/strong><\/td>Units<\/strong><\/td><\/tr>
Group retail turnover<\/td>29 152<\/td>25 875<\/td>12.7%<\/td>Rm<\/td><\/tr>
Less: White Stuff retail turnover<\/td>(2 376)<\/td>–<\/td>–<\/td>Rm<\/td><\/tr>
Group sales excluding White Stuff<\/strong><\/td>26 776<\/strong><\/td>25 875<\/strong><\/td>3.5%<\/strong><\/td>Rm<\/strong><\/td><\/tr>
TFG London retail turnover<\/td>245<\/td>145<\/td>69.0%<\/td>GBPm<\/td><\/tr>
Less: White Stuff retail turnover<\/td>(99)<\/td>–<\/td>–<\/td>GBPm<\/td><\/tr>
TFG London sales excluding White Stuff<\/strong><\/td>146<\/strong><\/td>145<\/strong><\/td>0.7%<\/strong><\/td>GBPm<\/strong><\/td><\/tr>
White Stuff retail turnover<\/strong><\/td>99<\/strong><\/td>88<\/strong><\/td>12.5%<\/strong><\/td>GBPm<\/strong><\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n

Earnings hit <\/h2>\n\n\n\n

TFG is currently finalising its results for the period, which are set to be published on 7 November 2025.\u00a0<\/p>\n\n\n\n

The group is expecting basic and headline earnings per share to decline by between 20% and 25% over the period. <\/p>\n\n\n\n

<\/td>Six months ended 30 September 2024<\/strong><\/td>Six months ended 30 September 2025<\/strong><\/td>Expected % change<\/strong>
(decrease)<\/strong><\/td><\/tr>
Basic earnings per ordinary share (cents)<\/td>368.3<\/td>276.2 to 294.6<\/td>(20.0) to (25.0)<\/td><\/tr>
Basic headline earnings per ordinary share (cents)<\/td>371.6<\/td>278.7 to 297.3<\/td>(20.0) to (25.0)<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"

The Foschini Group is expecting a large drop in earnings amid troubles in all of the regions it operates in. <\/p>\n","protected":false},"author":95,"featured_media":840481,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[3672,20827],"class_list":["post-840472","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-foschini","tag-white-stuff"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=840472"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840472\/revisions"}],"predecessor-version":[{"id":840483,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840472\/revisions\/840483"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840481"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=840472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=840472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=840472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}