South Africa's TFG sales fall 3.5% as consumers spend less
JOHANNESBURG, Sept 4 (Reuters) -South African fashion retailer TFG TFGJ.J said on Wednesday that sales for its 21-week period fell by 3.5%, as inflation and high living costs continued to put pressure on consumer demand for discretionary categories.
By 1327 GMT, shares were down 3%.
TFG, owner of the Foschini and Markham clothing stores said sales in its Africa arm, which contributes 69.9% to the group, were down by 1% in the 21 weeks to Aug. 24, as the late onset of winter in South Africa also added pressure at the beginning of the period.
South Africa still had significantly higher average temperatures in April and May, resulting in delayed consumer spending on winter merchandise.
The company, which also operates in the United Kingdom with Hobbs and Whistles stores and Australia with menswear clothing brands Connor and Johnny Bigg, said group gross margin increased by more than 100 basis points as gross margins improved across all territories thanks to clearing excess inventory.
Sales were also down in its Australian and London businesses by 5.5% and 12.7% respectively, in rand terms, with its London unit affected by inventory delays due to shipping disruptions in the Red Sea.
Earlier on Tuesday, its rival Woolworths WHLJ.J reported a full-year profit slump, also hit by constrained consumer demand.
The company said an expected interest rate cut this month, which would be the first in more than two years, would improve the outlook for the remainder of its 2025 financial year.
Reporting by Sfundo Parakozov; Editing by Nqobile Dludla and Jonathan Oatis
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