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Durban - The Foschini Group (TFG) shares slumped more than 2 percent on Tuesday despite the fashion retailer announcing that it had raised R500 million more than it intended in accelerated bookbuild.

The share price closed 2.06 percent lower at R148.56 on the JSE on Tuesday after the company said it managed to up the bookbuild offer from the R2billion it initially sought to raise by Monday to R2.5bn.

The company said it decided to let the offer increase due to a strong demand. It said the placement would result in the issue of 17241380 ordinary shares to qualifying investors at a price of R145 each.

“The sale price represents a 0.9percent premium to the 30- day volume weighted average price of R143.68 of TFG’s ordinary shares as at the close of trade on July 31,” the group said.

The funds raised would go towards the recent 100percent acquisition of Australia-based Retail Apparel Group (Rag).

TFG acquired Rag, a leading Australian menswear apparel retailer, for A$302.5m (R3.16bn) in May, further broadening its international expansion internationally.

The company said the transaction represented a move into chosen geographical areas with a product and value offering that was well aligned with its multi-brand business model.

It said the majority of Rag’s 400 stores, which consist of Rockwear, Tarocash, yd, Connor and Johnny Bigg, were located in high foot traffic areas within regional and suburban shopping centres.

TFG chief executive Doug Murray said the group was excited about the expansion into Australasia through the very successful Rag business and its well established and experienced management team.

Rand Merchant Bank, a division of FirstRand Bank and Morgan Stanley International acted as joint book runners for the book build.

TFG has been very active of late and at the end of May it also announced its official opening of its newly expanded and revamped Prestige Clothing factory in Caledon.

The group said the R75m investment represents a vote of confidence in, and a substantial investment for the local manufacturing industry, and enables continued job creation and economic growth for this sector.

The combined size of the new factory is now 4000m² up from 900m², with one third of energy needs being provided by solar energy.

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TFG also plans to open more than 110 international outlets in the current financial year with 150 new African stores earmarked in the continent. The group said this would increase trading space by some 5percent.

In the results for the year to end March, the group opened 331 outlets; 206 in Africa and 125 internationally. It closed 128 outlets as part of its ongoing capital optimisation project, converting 37 of these to other group brands.

In South Africa, 160 new outlets were opened during the year and 37 former Fashion Express outlets were converted to other brands in the group, bringing the total number of South African outlets to 2406.