TFG wants to produce a third of its denim apparel in South Africa in the next four years to improve the turnaround time for stock availability, and potentially create 1,000 jobs.
The retail clothing group has invested in a laser finishing machine to make its own denim.
It currently sources the bulk of its denim products from Lesotho, China, Mauritius and other countries, with a small portion supplied locally. Denim is its biggest selling category, and TFG provides different price points across brands — from international brands like G-Star Raw to in-house private labels.
CEO Anthony Thunström said denim makes up 20% of total apparel sales in South Africa, and TFG wants to produce 33% of all in-house denim products locally by 2029. This, he said, will enable the group to react faster to changing denim trends, and reduce stock days from the current 160 down to about 80.
We’re investing in an advanced laser finishing machine to create an unmatched local denim capability that is faster, leaner and more sustainable.
— Anthony Thunström, TFG CEO
“We’re investing in an advanced laser finishing machine to create an unmatched local denim capability that is faster, leaner and more sustainable. It’s a total game changer ... Denim trends shift incredibly fast, and when production is nearby we can move much more quickly,” Thunström said.
“In the process, we’ll probably bring more than 1,000 jobs back into this industry in South Africa, which, at the moment, I think is critically important.”
Thunström was briefing analysts about the group’s growth plans for the next four to five years.
About 82% of TFG’s clothes are made at eight factories in South Africa, up from 55% five years ago. This has resulted in the replenishment lead times dropping from 4.6 to 2.6 days.
Over the past five years, TFG — the owner of Foschini, Jet, SportsScene, @home, Fabiani, and American Swiss — has opened 1,000 stores, launched new brands and entered new categories such as bed sales through the acquisition of the Tapestry group of companies that includes Coricraft, Dial-a-Bed and The Bedstore, which will be rebranded into Mojo Beds.
In total, TFG has 3,600 stores in South Africa and will open 400 to 600 stores across all its brands.
Thunström said the company will double down on beauty products and sports apparel on the back of growth in the wellness market. He said post-Covid, the sector had “exploded globally, with consumers spending more and more on feeling better, looking better, and on physical activities ... healthy eating, beauty, skin care.”
He said consumers were looking for brands that support that lifestyle. “What’s interesting is how beauty and sport are now increasingly part of exactly the same conversation. It’s not just about looking good, it’s about feeling strong, confident, positive and well. The convergence creates a whole new area of rapidly scaling retail opportunity.”
Thunström said TFG sells over a third of all branded sneakers in South Africa, either through its stores or Bash, its online platform. The group will open 114 new sports stores, including TotalSports, SportScene and JD Sports.
He said beauty is also another “high potential [growth] category, and we’re approaching it with exactly the same focus as we did with sports. We aim to grow beauty from its current R1.2bn to at least R4bn by 2028.”
TFG will open its first stand-alone beauty store this month, with plans to scale up to 150 to 200 stores over the coming years. Thunström said sports and beauty were expected to generate R20bn in revenue in 2028.
TFG is also mulling the possibility of opening stand-alone Tempo stores, which have traditionally sold watches but have now introduced other categories of jewellery. The group’s jewellery business, a small part of the group, includes American Swiss, Sterns, and Galaxy. The company will also open a new jewellery sales brand called 1896, with the first store expected to open in Johannesburg in November.
Shani Naidoo, TFG’s director of retail, said the company sells three Tempo watches a minute. “We don’t talk much about Tempo. It’s high margin. We sell three Tempos a minute. We’ve just launched Tempo Jewellery; that business has gone from nothing to a substantial business already. We believe there’s a case, and we will look at it for stand-alone Tempo stores.”
Naidoo described the jewellery stack as “the hidden gem ... [small] but powerful”, with American Swiss and Sterns — two heritage brands that have been around for 130 years.
The plan is to grow the category turnover to R2.1bn from R1.7bn in the 2025 financial year. “This is a very, very difficult category. It is the most discretionary category of all,” Naidoo said. “I think we’ve seen about 400 independents close in the last two years. Every single chain store has closed in the last 10 years in South Africa. And worldwide, similar trends have happened.”
However, she expects profit to grow by 6.6% annually.
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