Doubts on TFG and Truworths

CAPE TOWN – Clothing retailers The Foschini Group and Truworths have long been mainstays of the domestic fashion scene.
For many years, Truworths was a front runner in the sector with strong performance in its operations and world-class metrics. But things have changed.
The Foschini Group has changed its business model and has focused on diversifying itself in terms of product categories.
The apparel retail has its challenges and SA had its weakest growth in seven years in 2016 and clothing retailers were hit hard.
Fund manager at 36One Asset Management, Evan Walker, says the outlook for the SA consumer is still decreasing and he finds the TFG strategy a bit confusing. “I certainly wouldn’t be exposed to Truworths yet and I’m not sure about the TFG strategy. It’s still a little perplexing for me.
It is moving to the UK where the retail landscape is weakening by the hour. It is not moving to geographies that are shooting the lights out. It seems to be a bit of a land grab.” Walker said.
Atiyyah Vawda who is a retail analyst at Avior Capital Markets says TFG’S growth profile is more resilient as it is less exposed to women’s wear and more exposed to high-growth areas like sports-wear, while Truworths has a premium product offering but its product tends to lack the top-line growth is weak.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


16 − 1 =