Foschini holds back on credit sales


Foschini holds back on credit sales

Published Date: 2019-09-04 | Source: Stephen Gunnion | Author: Stephen Gunnion

Foschini holds back on credit sales

The retailer says cash turnover has grown strongly as the year gets underway but it is closing the credit taps.

The Foschini Group (TFG) has reported a solid rise in sales as its 2020 financial year gets underway, despite subdued trading conditions in SA and the UK. In Australia, it says conditions remain satisfactory.

In a trading update released ahead of its annual general meeting, TFG said turnover grew 8.1% in the first 21 weeks of trading compared to the same period last year. A 14.1% rise in cash turnover for TFG Africa reflected significant growth in market share, while credit turnover rose just 0.9% as it took a more prudent approach to credit extension. It said this was due to the current difficult environment, and even more so with the National Credit Amendment Bill which was signed into law last month. The legislation is aimed at providing relief to over-indebted consumers earnings R7,500 or less a month.

The group's operations in Australia, excluding the G-Star franchise stores it disposed of last December, rose 15%. In the UK, TFG London grew turnover by 4.6% excluding concession turnover from department store chain House of Fraser, which was placed under administration a year ago.

Group online turnover rose 9.9% and now contributes 9.3% of total sales.

TFG said the outlook for trading conditions across all three business segments remained 'subdued and challenging', particularly in South Africa. However, it said its commitment to the successful execution of its strategy would continue to produce good results over time.

Its shares closed 5.9% up at R157.63.

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