TFG, whose brands include Jet, Markham and Fabiani, reported 5.7% growth in same-store sales in the three months to end-December, in a better showing than its rival Mr Price, which saw a drop in its like-for-like revenue.
Apparel store sales in November and December, which includes Black Friday, are closely watched by investors, as it represents the peak period for clothing retailers.
TFG may have been better prepared to mitigate load-shedding than rivals since it 70%, or 1,455, of its stores in SA have backup power. It plans to ensure all stores are equipped in the same way over the next few months.
It did, however, report increased costs related to diesel and security at stores with the highest levels of load-shedding.
TFG, which owns 30 brands, lost about 260,000 trading hours during the first nine months of its financial year due to blackouts. This represents 2.6 times the number of lost trading hours over the same period in the previous financial year, it said.
TFG also sells about 25% of goods on credit in SA giving it an advantage over rivals such as Mr Price as cash-strapped consumers turn to debt to fund clothing. However, TFG reduced the number of successful applications it granted for store accounts in the nine months to December from 24.5% to 20%.
Its decision to be prudent in granting credit remains “appropriate given the volatile economic environment”.
There were slight declines in cosmetic and jewellery sales in SA but a more than 13% increase in clothing sales in the final quarter of the year compared with the prior period. The clothing growth was strongly supported by its local clothing supply chain and sourcing, it said.
TFG makes about 75% of its clothing locally, allowing it to respond to trends in less than 50 days. This means its clothing is more likely to be fashionable than imports, which would require of buyers to guess what will be in vogue up to six months in advance.
It reported double-digit sales growth in SA — explained by the acquisition of Tapestry, owner of Coricraft, Dial-a-Bed and Volpes — of 18.7% in the three months to end-December. The new brands all added to sales.
Its UK business, which accounts for about 11% of revenue, struggled and only grew 2% year on year in the quarter even as more people returned to high street stores, while online sales declined.
The UK has suffered a significant spike in energy costs and TFG, whose brands include Whistles and Hobbs, said inflation is “straining the discretionary budgets of many households. Tough economic conditions and high levels of inflation continue to stretch consumer wallets and adjust spending habits.”
TFG Australia, which accounts for about 17% of revenue, delivered 20.9% sales growth, as measured in Australian dollars, in the quarter compared with the previous period.
The growth was off a low base as there were stringent lockdowns and mandated store closures Down Under in the last three months of 2021. However, the company said sales in Australia in the third quarter were above expectations.
The share price closed 1.95% higher at R113.74.
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