Foschini targets children’s gear

Doug Murray,TFG CEO had a media briefing updating on the new changes within the company in Rosebank North of Johannesburg.photo by Simphiwe Mbokazi

Doug Murray,TFG CEO had a media briefing updating on the new changes within the company in Rosebank North of Johannesburg.photo by Simphiwe Mbokazi

Published Aug 13, 2015

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Johannesburg - The Foschini Group (TFG) plans to expand its young adult wear offering in South Africa through acquisitions or startups to capitalise on what it sees as an emerging market.

The retail group wants to boost its small presence in that part of the industry, as South Africa has a young population.

As part of that drive, TFG will launch its 19th brand called Soda Bloc in Cape Town today. This joins 18 other TFG retail brands that trade in clothing, jewellery, accessories, sporting and outdoor apparel and equipment, cellular goods and services as well as homeware. The existing brands have a total of 2 700 stores across 26 countries.

Children’s market

Soda Bloc will have another outlet in the Promenade Mall in Mitchells Plain and will come to Sandton, Johannesburg, next week.

It aims to have 13 stores before the end of the group’s financial year in March.

A TFG spokesperson was unable to comment on the amount of money the group planned to spend on building the Soda Bloc stores.

At a round-table discussion in Rosebank yesterday, TFG chief executive Doug Murray said Soda Bloc was TFG’s effort at catering for the young adult market, as the brand was aimed at 16 to 19 year olds.

It also planned to expand its youth clothing division in its Foschini brand, and might open dedicated Foschini stores.

TFG shares on the JSE ended trade down 0.45 percent yesterday at R142.30.

TFG in recent years has tried to lessen its reliance on women’s fashion as global heavyweights, such as Inditex’s Zara, Topshop and Hennes & Mauritz, have begun to move in on local retailers’ turf.

The group could make another announcement about an acquisition or a partnership in this market segment in the next six weeks, chief financial officer Anthony Thunström said. The company was beaten to the chase last year when rival Truworths International bought the closely held Earthchild chain.

In another development, Murray said TFG was pushing all its brands on to its Omni channel e-commerce and online platform, for which it was targeting revenue of R550 million by 2020 with all brands available on the channel.

The Omni channel roll-out was launched a month ago, so revenue generated so far was likely to be minimal, with sporting divisions Sportscene, Total Sports and Due South going online with women’s fashion brands Foschini, DonnaClaire and others following.

The launch of Soda Bloc is TFG’s first major development since its R2.6 billion acquisition of the UK-based Phase 8 in January.

With Phase 8, TFG has acquired 100 stand-alone stores in the UK and an additional 200 concessions in independent department stores.

The brand has exposure in 17 countries and a presence in department stores around the world in retailers, including John Lewis, Debenhams, House of Fraser and some independent department stores.

Expensive product

Murray emphasised that Phase 8 was unlikely to be introduced into the South African market, except on a test basis, as it was an expensive product targeting the upper end of the market and with a 45 percent import duty would be overpriced for local tastes.

TFG’s other aspiration this year is the roll-out of Studio 8, a larger-sized fashion retailer for women in the 30-plus age group and primarily as a concession only format.

Murray said TFG was beginning to focus on Africa, with plans to roll out stores to the rest of the continent.

Last year TFG launched stores in Ghana, Zambia and Kenya.

Growth into the rest of Africa and online retail within South Africa were the long-term plans for the group.

“We believe we will grow space at around 6 percent per annum within South Africa,” Murray said.

* With additional reporting from Bloomberg and Reuters

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