NASPERSN: 246,709 +3709 (+1.53%)
South African retailer TFG to review Kenya, Ghana stores
* Firm very cautious about expanding in rest of Africa
* Will consider GDP growth, lease negotiations before
* TFG to launch new store format Sportscene in Sept
* Sportscene will have DJ booth, tattoo parlour
By Nqobile Dludla
JOHANNESBURG, Aug 15 (Reuters) - South African fashion
retailer TFG will decide next year whether to continue
trading in Kenya and Ghana where it has at least six stores in
each market, Chief Executive Officer Anthony Thunstrom said on
South African retailers have been performing poorly in the
rest of Africa as low economic growth and currency devaluations
hit sales. In July, department store chain Woolworths
retreated from West Africa for a second time.
"We've been very cautious in terms of where we have
expanded. Closer to home has been better for us. Much less risky
and at the moment we're doing okay," Thunstrom said.
TFG will review economic growth, legislature and lease
negotiation in Kenya and Ghana before making its decision,
"The other difficulty is, because of where the commodity
cycle is, government revenues are massively down in those
countries. So you get all sorts of funny tax things coming up
where suddenly the VAT rate has increased overnight or you can't
claim the input VAT and your cost of business goes up 20%," he
In its South African home market, Thunstrom said TFG will be
launching a smaller format Sportscene store that will have
entertainment such as a basketball court and a DJ booth, in an
effort to lure millennials into its stores and away from online
players such as Naspers majority-owned Superbalist.
The new format store will also have a tattoo parlour, a play
station and a sneaker cleaning service, he said. TFG's
Sportscene brand sells designer sneakers and athleisure wear.
The store will be launched in September in Johannesburg's
upscale Sandton shopping and financial district, Thunstrom said.
"Consumers do not enjoy shopping, for a variety of different
reasons, in big department store formats anymore," Thunstrom
"They (department stores) almost have no customer service,
anything you can buy in a department store today you can pretty
much buy online or at a specialist retailer and (they) do little
if anything to create customer experience."
In the full-year ended March, TFG reported a 19.6% rise in
retail annual sales to 34.1 billion rand ($2.23 billion), while
earnings before interest, tax, depreciation and amortization
(EBITDA) rose 6.2% to 5.2 billion rand.
($1 = 15.2652 rand)
(Reporting by Nqobile Dludla; editing by Olivia Kumwenda-Mtambo
and Elaine Hardcastle)
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