South African retailer TFG expects to deliver 10 billion rand ($580 million) in annual turnover from its homewares division by 2027, up from 2 billion rand, buoyed by strong demand, its CEO said.
The owner of British womenswear brand Hobbs and South Africa’s Foschini clothing brand recently expanded its furniture and homewares business by buying the mid-to-upper market Tapestry Home Brands earlier this year and relaunching the Jet Home brand as part of its lower-cost clothing brand, Jet.
The expansion came at a time when demand for furniture and homeware had risen as COVID-19 lockdown restrictions forced people to work and study at home, a trend that is waning as work-from-home mandates have eased and discretionary spend comes under pressure.
But TFG Chief Executive Officer Anthony Thunstrom still sees strong demand for the company’s lower-cost homeware items, while affluent customers continued to buy items for their homes, he told Reuters.
Therefore TFG wants to expand the group’s furniture and homeware portfolio by opening 100 new stores under the Tapestry brand, owner of the Coricraft, Volpes and Dial-a-bed chains, and 150 Jet Home stores in the next three years, he told investors.
TFG, which also has operations in Britain and Australia, is also trialing the manufacture of previously imported @Home sofas in South Africa to reduce reliance on strained global supply lines and associated rises in shipping costs and delivery times.
“The first samples that came out from production were between 20% and 25% less expensive than importing them. So we think, particularly in a tough environment, if we can pass on a 20%-25% saving on our higher cost item to a consumer it’s going to drive volume, it’s going to drive margins,” said Thunstrom.
TFG reported an 18.1% rise in headline earnings per share (HEPS) and retail turnover growth of 23.5% at 23.5 billion rand in the six months ended Sept. 30.