Let’s hope the new owners do a better job. A crisis is a great time for a bargain, I guess. oldTweetLink.parentNode.removeChild(oldTweetLink); If it was such a bargain then someone would have paid more in a free market environment. jQuery('html, body').animate({ When pressed, Thunström did admit that the “Jet side of the business is probably the most attractive part of the Edcon group”. Is R200 million a year in costs achievable? So Jet fills the gap. }); event.preventDefault(); TFG is also only buying certain stores in neighbouring countries. } Read: Why TFG’s Jet deal is the bargain of the century. function getSelectedText() { Exact is the closest to a value brand (at scale) that TFG operates, and one could argue that Jet extends this proposition into lower-income segments. The Foschini Group (TFG) announced that it has officially bought 382 stores of the Jet business from Edcon. It's official! How likely is that to happen?? var range = window.getSelection(); Online with your Master or Visa card Sign up on TFG Online and you will be able to pay your account from anywhere on any device using your Master or Visa credit or cheque card ; In any TFG … Listen to Nompu Siziba’s interview with Just One Lap founder and MoneywebNOW host Simon Brown: Content hosted by iono.fm y = (e.clientY + 5) + 'px'; 3 or so years ago, MRP opened a store in Tygervalley. “Jet is a leading Southern African retailer (by brand recognition and market share) and would provide TFG with a strategically important expansion into the value segment of the Southern … imageBtnNext: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/bg_direction_nav.png", I went to have a look and the range was impressive and corresponded with the demographic that frequents that shopping centre. In 2018, the Jet division had a 33.3% gross profit margin. In a statement, the … These are the stores that sell ‘basics’ and cater primarily to women and children. jQuery(document).ready(function () { However, more Jet stores could be included as negotiations with several landlords are still underway. Ban the following : ” We are optimistic ….blah blah blah “. if (textParagraph) { Getting Jet to a position where its gross margin is between 35% and 40% is definitely achievable. The MRP people doing the ranges per store have been evidently far out of touch for quite some time. TFG CEO Anthony Thunström, seen here with the group’s CFO Bongiwe Ntuli. The transaction includes the transfer of 382 South African Jet stores … Thunström told Moneyweb this will take TFG’s overall retail floor space in South Africa’s malls and high streets to over 900 000m2. Relatively cheap shares but massive debt…..although SASOL is better managed and with good forecast. if (text === "") Welcome to TFG Online. }, false); imageLoading: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/spinner_moneyweb.gif", And while the planned R3.95 billion TFG rights issue is not strictly necessary to fund this deal, it certainly gives the group more headroom (particularly regarding working capital) and removes much of the looming problem that is a R5.8 billion debt repayment due in March next year (some will no doubt be refinanced). jQuery(appendedTweetLink).css({ TFG reported … It will appoint an independent senior counsel to conduct the investigation. Those benefits will come in time, however. You can get more information about how we use cookies in our It addresses the ‘value’ market segment, one where TFG is not particularly active. newTweetLink.href = "https://twitter.com/intent/tweet?text=" + encodeURI(text) + "&url=https://www.moneyweb.co.za/news/companies-and-deals/tfg-set-for-jet-value-retail-expansion/&via=Moneyweb"; imageBtnNext: "https://www.moneyweb.co.za/wp-content/themes/moneyweb-domination/images/bg_direction_nav.png", TFG’s debtors book operates at a healthy margin so expect a boost there as well. JOHANNESBURG (Reuters) – The Foschini Group (TFG) is set to buy 371 stores and selected assets of Jet for 480 million rand ($28.7 million) from Edcon’s administrators, it said on Monday, allowing the … }); Most clothing retailers are getting it wrong in SA. Indicative of the tough times we are in. Image: Moneyweb. The business rescues plan lists around 378 profitable stores, but there may have been some adjustment since. Use your TFG account card to shop from the comfort of your own home. With this kind of expertise and ability to act rapidly, plus the efficiencies to be gained by using its infrastructure, could it take even more costs out of the Jet business? Edcon, in business rescue, sits with the liabilities. What’s even more telling is how Mr Price must be suffering at those same locations. Around 4 800 jobs have been saved through the deal. In a shareholder statement on Monday (13 July), TFG … There is very little ‘high street’ retail in SA, let alone clothing high street retail. What’s more telling is what it’s not buying. The core, profitable footprint is likely generating somewhere between R5 billion and R6 billion in sales a year. The gross margin for this unit was 47.5%, with an Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin of 27.9%. } “Covid-19 has seen a shift in buying patterns, not just in terms of fewer people shopping at super-regional malls and an increase in online shopping, but also people moving away from smart wear to more casual attire [with the work-from-home trend gaining traction],” Thunström said. TFG has concluded an agreement to own Jet, which is owned by the Edcon Group. they are actually buying debt….similar situation with SASOL. This means it already has a relationship with some of these customers (and an understanding of their purchase behaviour). TFG Africa has a footprint of 2 577 stores – so, while not insignificant, an additional 400-odd stores is not that much of a stretch. Creditors are in control , they want their debt paid. He has been a financial journalist since 2005. Foschini Group confirms purchase of more than 400 Jet stores “We plan to expand the Jet chain further over time,” said Thunström. } TFG said its proposed deal would enable it to acquire selected parts of the JET business, a unique opportunity which previously was not possible. If married in COP, is my partner’s pension at risk due to my business debt? } oldTweetLink.parentNode.removeChild(oldTweetLink); JOHANNESBURG – The Foschini Group (TFG) on Monday announced plans to buy 371 Jet stores from Edcon for R480 million, signalling its extension into discount retail clothing and footwear. The 371 store number is important, as this comprises only those South African stores that are profitable.
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