TFG's sales growth slows in Christmas quarter due to soft Black Friday

China Cultural Tourism and Agriculture

24/01/2024 08:17

JOHANNESBURG, Jan 24 (Reuters) - South African fashion
retailer TFG  TFGJ.J  on Wednesday reported slower sales growth
in its third quarter, hurt by a softer Black Friday, power cuts
and delays at ports that have affected supplies for the
industry. 
    TFG, owner of the Foschini and Markham clothing stores, said
the Black Friday discount event in South Africa was generally
soft, with higher levels of power cuts over that weekend.
    "Consumers remain under pressure, with higher inflation and
interest rates adversely impacting sales," the retailer added. 
    Despite the challenging economic context at home, festive
season trade delivered "pleasing" results, with core merchandise
categories achieving strong growth in December, it said.
    Group turnover for the quarter ended Dec. 30 rose 4.5% from
the same quarter in 2022 when sales jumped 17.3%. For the
nine-months ended Dec. 30, turnover was up 9%, a slowdown from
growth of 20.8% in 2022.  
    The company's Africa business grew retail turnover by 5.1%
in the quarter, with like-for-like turnover growth of 0.7%.
Performance in its London and Australia businesses normalised
after demand built up during the COVID-19 pandemic. These
businesses saw sales declines of 3% and 7.3% respectively. 
    Although retailers have been moving production closer to
home, they still rely on overseas markets for some products such
as fabrics.
    South African state-owned logistics company Transnet has
said backlogs at the Port of Durban and congestion at Richards
Bay were due to factors including adverse weather and
under-investment in equipment and maintenance.
    TFG said the impact of import delays was offset to an extent
by the ability to increase volumes from its local manufacturing
hubs.
    Its fashion rival Woolworths  WHLJ.J  also reported on
Tuesday a slowdown in half-year sales growth and flagged a lower
profit as shoppers spent less.  

 (Reporting by Nqobile Dludla
Editing by Mark Potter)
 ((nqobile.dludla@thomsonreuters.com; +27103461066;))