The TFG Group has announced robust turnover growth of 16,9% to R11,4bn, for the six months to end-September 2016. Turnover from TFG Africa (all its African operations) grew by 9,5%, with comparable sales growth of 2,1%.
The results were achieved despite a subdued economic climate and difficult trading environment, which has led to a decline in earnings for most retailers.
Doug Murray, CEO, TFG attributed the results to diversification, international expansion, supply chain optimisation, operating cost controls, capital allocation discipline and attracting cash customers.
The Group now has 22 brands, spanning a variety of age and income groups. Over 3,220 outlets stock clothing, jewellery, accessories, sporting apparel and equipment, homeware and cellular goods and services.
As part of a capital optimisation programme, 33 Group stores were closed during the reporting period and another 129 outlets were opened: 46 internationally, 74 in South Africa and nine in the rest of Africa. This includes the first TFG store in Kenya – Sterns – in Nairobi’s The Junction mall.
Trading space in African operations increased by 5,3% during the reporting period. The Group plans to open more than 100 new outlets in the second half of the year: 90 in Africa, and the balance internationally.
“Expanding our footprint in the rest of Africa remains a Group objective in line with our growth strategy.”
TFG’s e-commerce offering increased with the addition of Foschini cosmetics, Markham and Fabiani to the seven brands already online.
Despite the uncertain outlook for the domestic and global economy, Murray said that continued commitment to strategic objectives around growth, profit, customers and leadership development would support efforts to achieve a reasonable result for the full year.
“Cost control is a key focus area, but we are continuing our investment in future growth.”
Initiatives planned for the second half of the year include working capital management and capital optimisation projects.
Concerned about the continued acceleration in crime-related losses in South Africa, TFG has already invested in various forensic capabilities to manage this risk. It has also started to roll out a revised and enhanced security strategy.
As always, the festive season trading will largely determine performance for the full year.