Load shedding proves a drag on TFG


Load shedding proves a drag on TFG

Published Date: 2020-09-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

Load shedding proves a drag on TFG

Adding insult to Covid-19 injury, the retail group has lost about 15,000 trading hours due to load shedding.

The Foschini Group (TFG) says trading conditions in all three of its main territories remain challenging, with SA, the UK and Australia all in recession. Consumer spending is under significant pressure, exacerbated by further job losses and social distancing rules.

To make matters even worse, the retail group says it lost about 15,000 trading hours because of load shedding between May and August. In Australia, trade continues to be impacted by the re-introduction of lockdown measures in some states. While its UK stores started reopening from mid-June, it says the ramp-up has been very slow due to social distancing rules and European restrictions that remain largely in force.

In a trading update, TFG said retail turnover for the 22 weeks to 29 August were down 30% on the same period last year. Sales at TFG Africa declined by 26%, while TFG Australia fell 28%. Its UK operations, housed in TFG London, dropped by 58%. These include Hobbs, Phase Eight, Whistles, Damsel in a Dress and Studio 8.

In SA, trade had improved in line with the easing of lockdown restrictions but remained volatile. Homeware and cell phone sales had, however, consistently shown turnover growth since the reopening of stores on 1 May. Online sales more than doubled over the period to make up 4.5% of TFG Africa's turnover.

It warned that earnings for the six months to end-September were likely to be at least 20% down on last year.

In August, TFG reached a deal to buy retail chain JET from Edcon Group. That followed its announcement of a R3.95 billion rights offer a month earlier aimed at shoring up its balance sheet and providing spare cash to grow its business.

TFG's shares fell 4.8% to R86.82 yesterday.

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