TFG posted a positive trading update on the JSE on Friday, saying it experienced solid November/December trading, including “a record high” Black Friday for the group.
The retail giant – which counts Foschini, @home and American Swiss amongst its string of store chains – noted that the group’s consolidated turnover grew 5.9% for the nine months to 28 December 2019, compared to the corresponding period in 2018. TFG also said that 73.6% of group turnover is now made up of cash sales.
Most SA retailers see a sizeable chuck of turnover being generated in the November/December period, however, November trade has been experiencing significant growth due to the Black Friday sale bonanza.
TFG said the record Black Friday performance is “increasingly measured against the
high base that has been created” over the past several prior comparative periods. It added that subsequent trade continues to be in line with management expectation, while performances were in line with expectations in all regions, apart from TFG Australia, which continued to exceed expectation.
The Cape Town headquartered group also has a presence in several African countries beyond SA’s borders, as well as in the UK. It said its TFG Africa division (which include SA operations) showed resilience across all merchandise categories and despite the high base of the past several years, produced turnover growth of 5.9%.
“This included a new record high Black Friday performance, which helped to offset the negative impact of the load-shedding experienced in South Africa during December… Same store turnover grew by 4.1%,” it noted.
“Cash turnover grew pleasingly by 11.2% whilst credit turnover declined by -1% as a result of the Group’s prudent approach to credit in the current constrained economic environment,” it added.
TFG’s shift away from credit sales to more cash sales comes as its struggling competitor, Edcon, is now pushing growth of its credit sales as part of its turnaround plan.
Meanwhile, TFG’s UK unit, TFG London, reported a turnover decline of 1.1% against what it described as “a very subdued and disrupted environment” in the face of Brexit.
It noted that the environment was “characterized by large store format closures and the accelerated restructuring of the department store model by owners and lenders; as well as continued footfall declines on the high street amidst Brexit uncertainty and generally poor retail sales being reported for the festive season period.”
TFG Australia’s turnover grew 11.4%, which the group said came “off an already high base”. Excluding the G-Star RAW franchise stores disposed of in December 2018, TFG Australia’s turnover grew by 15.3%, with a record high Black Friday performance in November.