TFG has adopted a cautious approach to the rest of the financial year following a poor first-half performance, described by CEO Anthony Thunström as “incredibly tough.”
He said conditions remained challenging. “Our performance during the more heavily weighted second half will determine the outcome for the year, and once we get through peak season, we will be in a better position to assess where the year may end.”
TFG, which owns Foschini, Volpes, Sterns, Markham, and The Fix, reported a 12.2% increase in revenue to R31bn, lifted by the inclusion of White Stuff, a London-based fashion retailer acquired a year ago. Excluding White Stuff, growth was 3.7%.
Operating profit declined 9.9% to R2.3bn, reflecting persistent macroeconomic pressures and higher promotional intensity across winter months. “The period was marked by weak and uneven consumer demand in South Africa, particularly in June and September, which impacted margins and profitability,” said Thunström.
He said those months were difficult across all three markets. “June was pretty awful, with almost no growth for us and a steep negative 4% contraction for the rest of the market. July and August bounced back … and then we went into September with a really strong first week where, again, we enjoyed double-digit growth.
“The last three weeks of September, however, were dismal, and we dropped approximately R400m of turnover to the end of the month with a negative 0.7% growth.
Consumers, not only in South Africa, are still under massive pressure
— Anthony Thunström, TFG CEO
“Consumers, not only in South Africa, are still under massive pressure; the economic recovery that everybody was forecasting this time last year … hasn’t yet come through. Household budgets are really getting stretched towards the end of the month,” he said.
Thunström weighed in on the rise in gambling, saying the exponential growth online over the past five years was a concern. Online betting alone now equates to 0.72% of total GDP, TFG said. “This is one of the highest ratios in the world, with gambling now equating to 1.6% of total household spend in South Africa versus total household spend on clothing and footwear of 5%,” said Thunström.
According to the National Gambling Board, the industry generated a turnover of R1.5 trillion in the 2024 financial year. The number of distressed gamblers seeking help soared sixfold to 1.1-million in the financial year 2024/25. “If left unmitigated… [there will be] less money to be spent on other areas of discretionary spend," he said.
“We are aware of the recent Supreme Court [of Appeal] ruling that online fixed odds gambling is illegal in South Africa, and we will certainly be adding our weight to the calls for proper regulation of an industry that is almost entirely extractive and of no benefit to the country.”
At the end of September, TFG had 4,922 stores, with 93 new stores opened and 94 closed during the period. In Africa, 47 stores were opened and 42 were closed, with TFG Africa now trading out of 3,619 stores in six countries.
The company will continue to revamp and open new Jet and Jet Home stores. It will also launch a new high-end jewellery brand called 1896 to cater to more affluent customers. TFG has 440 jewellery stores under its Sterns and American Swiss brands. While the company would not roll out more jewellery stores, Thunström said a focus would be on “increasing [our] lab-grown diamond offer, where we already do own the market”.
TFG Africa delivered sales growth of 3.7% for the five weeks ended November 1.
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