Pallade Veneta - TFG Africa Online Sales Surge 53% as Retailer Closes 120 Stores

The Foschini Group’s African business reported a 53.3% increase in online sales for the six months ended September 30, with its Bash e-commerce platform driving significant digital growth. This surge coincides with the retailer closing 120 underperforming physical stores as it shifts focus toward capital-light digital channels.

Online commerce now accounts for 10.9% of TFG Africa’s total sales, a notable rise from 7.4% during the same period last year, according to interim results released Friday. E-commerce revenue within the division’s retail segment climbed to R2.2 billion from R1.4 billion.

The acceleration in digital adoption follows a steady upward trajectory. TFG Africa’s online sales grew by 40.2% in the first half of the previous financial year and by 49.2% for the full year ending in March, when online channels reached 10% of the division’s sales in the fourth quarter.

Conversely, physical retail operations are contracting. TFG Africa closed 120 stores during the half-year period, primarily due to expiring leases, while opening only 41 new locations. This net reduction cut its trading space by 2.6%, leaving the group operating from 3,585 stores across six countries. The company plans to close an additional 60 to 80 stores in the second half of the financial year.

Leveraging Bash and its fulfillment capabilities is one of four key priorities for TFG Africa, alongside cost reduction, closing weak stores, and expanding its credit operation. The group’s outlook emphasizes a continued focus on capital-light growth through digital channels. Management has also placed Bash under unified leadership with its credit and rewards businesses to streamline operations.

Despite the digital pivot, overall sales growth remained modest. TFG Africa’s total sales increased by 3.8%, outperforming the 1% market growth reported by the Retail Liaison Committee, which tracks clothing retailers. Segmental operating profit rose by 2.7%, and like-for-like sales, which exclude the impact of store openings and closures, grew by 2%.

The interim results did not disclose whether the Bash platform is currently profitable.

Trading conditions have since softened. TFG Africa’s sales fell by 0.7% in the five weeks leading to October 31, compared to a 3.7% increase during the same period last year. The group expects consumer spending to remain constrained, citing higher fuel prices and the resumption of interest rate increases.

At the group level, revenue remained flat at R31.4 billion. Headline earnings per share declined by 6.8% to 272.8 cents, dragged down by underperformance in TFG’s UK and Australian businesses.

The results also provided the first measure of the impact from a cyberattack on TFG London, identified on October 11. Demand on the Phase Eight, Hobbs, and Whistles websites dropped by 30.2% in the five weeks to October 31, and stores for these brands traded at reduced levels. In contrast, White Stuff, which was not affected by the incident, grew sales by 4.8% over the same period.

TFG stated that the three affected brands are recovering and confirmed it holds cyber insurance. The company has reported the incident to UK authorities, though the results did not specify whether customer data was compromised. Because the attack occurred after the reporting period, its financial impact is not reflected in the interim figures.

H.Ercolani--PV