WOOLIES: 4,493 +188 (+4.37%)
TFG to open retail brand in Australia, test appetite outside Africa
JOHANNESBURG, Aug 30 (Reuters) - South African clothing and
homeware retailer The Foschini Group (TFG) said on
Thursday it was launching one of its African retail brands in
Australia to test appetite outside its traditional market.
The move announced by outgoing CEO Doug Murray and his
successor, Anthony Thunström, aims to show whether TFG's local
brands can thrive in more developed markets than Sub-Saharan
Africa where weak economies are seen limiting potential.
"We will have six stores open on a test basis by the end of
this year," Thunström said without naming the brand.
"Our own modelling suggests that if the six stores work we
can get up to well over 100 of those stores in Australia and if
it works in Australia it can work elsewhere," he added.
TFG, which also owns American Swiss, started in Australia in
2017 when it bought menswear chain Retail Apparel Group for
302.5 million Australian dollars ($220.4 million).
"We think we'll go into Australia with this brand and be a
disrupter. Australians have been seen for many years to come to
South Africa and be disrupters, well we can (also) go into
Australia and be disrupters," Murray said.
TFG's rival Woolworths Holdings has also built up
its Australian operations, acquiring David Jones. But it has
faced delays in redeveloping that business.
Woolworths booked an impairment charge of 6.9 billion rand
($470.87 million) this year against the carrying value of David
Jones as a result of the cyclical downturn and structural
changes that have hurt the Australian retail sector.
Launched in 1924, TFG has 28 brands in 32 countries, mostly
in Africa. TFG said it was "extremely cautious" on expanding in
Africa due to a mix of lacklustre economic growth, the high cost
of rental agreements and infrastructure bottlenecks.
($1 = 1.3727 Australian dollars)
($1 = 14.6536 rand)
(Reporting by Nqobile Dludla
Editing by Edmund Blair)
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