Foschini warns of leaner times


Foschini warns of leaner times

Published Date: 2020-05-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Foschini warns of leaner times

The retailer says the Covid-19 lockdown and store closures will have a significant impact on its business this year.

The Foschini Group (TFG) says it has felt the impact of Covid-19 across all its operations globally. However, the retail group says the initial decline in demand following social distancing, lockdowns and store closures has started to reverse as its shops partially re-open.

In a trading update, TFG said while its stores in SA, the UK and Australia recorded a sharp drop in sales in March, full year turnover still grew by 3.6% from a year earlier. TFG London was worst hit, with the Covid-19 impact felt earlier in the UK.

In South Africa, its stores were all closed from 27 March to 30 April, with its Maitland manufacturing facility in Cape Town restarting operations on 27 April ahead of its stores starting to trade again on 1 May in a phased manner as the country switched to level 4 of lockdown restrictions.

In the UK, its TFG London operations have remained closed since 23 March, except for e-commerce activity which it says has continued to strengthen over the past few weeks. TFG London successfully accessed UK government funding to support furloughed staff on top of the relief it got on business rates and property. It said TFG London's operations in other countries had also been impacted by lockdowns and store closures.

In Australia, the group has started to re-open stores, with all shops expected to be trading by the end of the month. During the lockdown, online sales beat expectations.

TFG said group turnover in April was well below last year. For reference, it said it achieved turnover of R3.2 billion for the first five weeks of its last financial year. It said the impact of lockdowns and store closures in all three jurisdictions and the ongoing uncertainty would have a significant impact on its business in the year ahead.

TFG plans to release its results on 18 June. Its shares rose 4.4% to R64.67 on Friday.

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