Johannesburg - The Foschini Group (TFG) has set a growth target of a R39 billion turnover by 2021.
The chief financial officer, Anthony Thunstrom, said TFG, which has 22 brands in 31 countries, was on a growth trajectory. “We have a target of having a turnover of R39bn by 2021 in 4 200 floors across the country,” Thunstrom said.
He said despite the group closing its stores in Nigeria due to exchange controls, Africa remained part of its growth strategy, with 184 stores on the continent and a target to grow stores to 330 by 2021.
But given the commodity environment, TFG’s growth prospects on the continent have been revised down. “Our target is now closer to 300 stores by 2021,” he said. TFG was, however, building 10 stores in Kenya. “We could not pay for stock going into the country.”
In the UK, the group said it was planning to cut costs at its Whistles chain through revising supply chains.
Thunstrom said the group was hoping to roll out online shopping to 11 of its brands by the end of the year, and to all 22 brands by the end of next year.
TFG’s challenges include the introduction of the government’s affordability assessment in terms of the National Credit Regulator. Thunstrom said new accounts at the JSE-listed group were down 30 percent since September.
This as Truworths last week said the administrative burden for customers to produce proof of income had seen the new account acceptance rate drop to 24 percent from 30 percent with R250 million in loss in credit sales in the year to June.
Affordability
Thunstrom said creditworthy customers were prevented from obtaining access to credit, and affordability was not the real issue. “The real issue is that providing proof of income is denying people at the bottom end of the ladder access to credit,” he said. “A huge chunk of South Africans do not have payslips. For example, 40 percent of domestic workers do not have payslips.”
He said lay-bys had spiked 40 percent as of two weeks since the introduction of the affordability assessments.
The new affordability assessments in the National Credit Act require a credit provider to conduct an affordability assessment before entering into a credit agreement with a consumer.
Thunstrom said the outlook for the retail sector was tough owing to the dire economic growth expectations.
Shares fell 4.49 percent yesterday to close at R146.
BUSINESS REPORT