Retailer The Foschini Group reported an operating loss of R719.2 million for the year ended March 2021, hit hard by the impact of the Covid-19 pandemic and resulting lockdowns in the various territories in which it operates.

Retailer The Foschini Group (TFG) on Thursday reported an operating loss of R719.2 million for the year ended March 2021, hit hard by the impact of the Covid-19 pandemic and resulting lockdowns in the various territories in which it operates.
This was down from an operating profit of R4.7 billion in the prior year.
Group revenue declined 7.5% to R35.6 billion, with group retail turnover down 6.7% to R33 billion, the clothes, homeware and jewellery retailer said.
Brands in the The Foschini Group stable include Markham, AmericanSwiss, @Home, Fabiani and Total Sports.
Online retail turnover now contributes 12% to group retail turnover with strong growth for TFG Africa and TFG Australia at 132.4% and 58.1% respectively, TFG said. In the UK, however, online performance continues to be negatively impacted by weaker department store online channels, it said.
TFG entered the UK market in 2015 with the acquisition of Phase Eight, adding Whistles, Hobbs, Studio 8 and Damsel in a Dress to its portfolio.
TFG started in Australia in 2017 when it bought menswear chain Retail Apparel Group. TFG Africa however, continues to contribute almost two thirds of the group’s turnover.
Headline earnings per share and basic earnings per share decreased by 80.8% and 166.3% respectively. “Earnings performance was impacted by the Covid-19 pandemic and outlet closures,” TFG said in a statement.
The supervisory board, the group said, has decided that it would be prudent not to declare a final dividend at this year-end, but plans to resume dividends in the 2022 financial year (March 2020: 335 cents per share for the full year).
It said that most of the groups 4,083 trading outlets across all our major trading territories – South Africa, the United Kingdom (UK) and Australia – were closed in the first month of the financial year (April 2020).
In South Africa, 447 jewellery stores remained closed during the month of May 2020 due to the prevailing lockdown restrictions.
Further lockdowns were experienced in certain states of Australia, in the UK and other international markets, which continued to adversely impact trade performance in these countries throughout its 2021 financial year.
In Southern Africa, the group acquired 425 Jet stores in 2020 for R385.3 million which it said, resulted in the recognition of a bargain purchase gain of R709 million. Jet, it hopes, will provide TFG with a strategically important expansion into the value segment of the Southern African retail apparel market.
The group generated cash from operations of R9.4 billion for the year ended March 2021.
Segmented performance
The impact of the Covid-19 pandemic on trading activity and the decrease in new account initiatives, contributed to demand for new accounts decreasing by 41.9% year-on-year.
Approval rates at 14.9% on average for the financial year reflect the conservative new account strategy, TFG said.
Demand did however improve by 50.1% in the second half of the financial year compared to the first half, as marketing activities were resumed, the group said. The average approval rate for the second half of the year increased to 19% (H2 2020: 9.1%) to stimulate responsible credit retail turnover and debtors book growth.
The muted new account growth and the impact of the lockdown on store activity, resulted in credit sales decreasing by 23.6% year-on-year for the financial year. Credit sales now contribute 30,7% (March 2020: 40.9%) of total TFG Africa retail turnover.
“Despite the challenges described above, the group, in line with its strategic intent, continues to invest for the long term and to further strengthen its digital and local supply chain and manufacturing capabilities. Now that the UK has reopened for trading, most of our brands are currently trading above expectations as consumers start to return to stores,” it said.
Read: Foschini Group gets the green light to acquire Jet