One of TFG’s Australian brands is selling plus-size clothing for larger and taller men in the US as an online-only business, showing how the company, which is continually increasing its manufacturing capacity in SA, can expand to new markets.
Johnny Bigg, which sells in sizes up to 10XL in Australia and New Zealand, and now the US, caters to a space in the market that TFG CEO Anthony Thunström said is underserved globally. The brand, which is aimed at men who want stylish, formal and branded clothing, including suits, is exceeding expectations in the US, he said.
Thunström told Business Day that other businesses’ brands have asked TFG if it would consider selling some of its SA brands online in new markets. It is, however, not something TFG is doing yet. “We’ve been approached to go into a couple of markets outside SA directly online ... [but] we haven’t hit the button on any of those yet,” he said, noting that they receive a lot of requests for collaboration.
One of the world’s largest clothing retailers, Shein, manufactures in China, adding up to as many as 6,000 styles a day. It sells online-only outside China, primarily in the UK, US and Europe. Consulting firm Morgan Stanley estimates it will turn over $20bn (R320bn) this year and is competing with Inditex and H&M, the world’s largest clothing retailers.
Shein’s success shows that selling online-only into new markets is possible. TFG, like most SA retailers, is investing heavily in its online capabilities.
In SA, TFG has hired over 85 specialist IT staff and even went as far as buying an app developer to access its technical team. It also hired the founders of Superbalist, SA’s first online clothing store, to run its single online store, which showcases all its brands, including @home, Jet, Fabiani and American Swiss.
The new tech teams managed to decrease the cost per order by 19% between May last year and the end of March. They decreased the delivery time by 10% and saw an 18% increase in profit as a result.
Online sales contributed 10% of TFG’s 2022 financial year revenue, an 11.7% increase on the previous period — from a high base when it was forced to use online sales in the UK and Australia amid strict lockdowns.
TFG is also able to manufacture quickly, taking 40 to 50 days to get goods in store in SA. TFG manufacturers 75% of its own clothes and has plans to double the local production capacity and workforce by 2026.
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