Foschini Group posted flat sales, with its small revenue growth coming from 61 more stores opened during the year ended March.
The homeware to jewellery retail chain owner claimed it cut its cloth to suit consumers' tighter pockets, but investors sent its share down 4% to close at R34.49 yesterday.
While its retail turnover grew only 6% to R7.7 billion, interest income from selling on tick grew 20% to more than R1-billion.
Money from insurance accompanying those deals grew 125% to R80-million.
The biggest growth in its revenue segments came from customer charges by RCS, its retail card partnership with Standard Bank. Charges to RCS account holders grew 150% to R99-million.
Foschini's flagship women's clothes chain, which contributed 40% of total sales, posted “unsatisfactory same store growth of 1.2%”, the results statement said. “Particular emphasis is being placed on the Foschini stores business, the benefits of which should be evident in the forthcoming summer season,” it said.
“The Donna-Claire and Fashionexpress stores continued to trade satisfactorily … and will be actively expanded in the next year.”
The group plans an aggressive roll-out of more than 100 new stores in the year ahead, despite the pinch on disposable income.
Its interest and insurance income grew despite its cash sales as a percentage of total sales increasing from 33% to 36%.
Foschini claims this was not just due to the National Credit Act. Whereas other retailers rushed to offer credit before the tougher legislation came into force, it had introduced tougher criteria.
Its jewellery division, comprising American Swiss Jewellers, Sterns and Matrix, surprised by growing turnover nearly 7%, despite the consumer slowdown and higher gold prices.
Source: Business Times
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