The retail group reported a retail turnover of 6.66 billion rand for the half year ended 30 September 2013 from 6.11 billion rand in the previous comparative year.
“There’s been quite a significant change in the last 12 months and I think everybody remembers about a year ago that the unsecured lending market, the growth in that market, came to a grinding halt,” Foschini CEO Doug Murray told CNBC Africa on Thursday.
“That’s clearly shifted the credit and cash position here. What is encouraging for us is that we still have very strong cash growth, at 12.7 per cent, but the consumer is clearly stressed and we have obviously taken action to reduce the risk from a credit point of view.”
Foschini expects to have 300 stores outside South Africa by 2018, and plan to open a further 92 stores in the second half of the year. The group’s brands include Markham, G-Star, Fabiani, Sterns and American Swiss.
“It’s no surprise to us that credit sales are at the levels that they are at. What is good for us is the strong cash sales growth. For the same period last year, we actually had an excess of 19 per cent cash growth,” Murray explained.
“It also indicates that several of our brands that we now have, operate in the upper middle to upper sector. That consumer is somewhat less stressed. That’s one of the reasons why I think we have stronger cash growth.”
Foschini’s the popularity of the group’s high end products, has come at a time when international brands have begun to see South Africa as the next thriving retail market.
South Africa is already home to numerous global fashion retail brands, and more entrants into the country’s market will give it healthy competition.
“Across the whole of the Foschini Group, each of our trading divisions is looking at a much faster response model. It’s where international retailing has been moving for some time, and I don’t think we’re any different in that regard,” said Murray.
“We’re obviously trying to get out a much larger percentage of our products that go in a shorter period of time. If you can do that, then you reduce the risk, you’re more likely to get the product right, and that’s been our key driver.”