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UPDATE 1-South African retailer TFG looks to technology to adapt to retail changes

(Recasts with tech investments)

JOHANNESBURG, May 23 (Reuters) – South African retailer The Foschini Group (TFG) is investing $35 million in technology to adapt to the changing landscape of apparel retail, where online shopping has put a pressure on brick and mortar.

Over the last decade, the owner of Sportscene and homeware and furniture chain @home, has been investing heavily in technology, Chief Executive Officer Anthony Thunström said, in order to keep pace with changing trends and the efficiencies demanded by fast fashion.

The retailer just started rolling out radio-frequency identification technology to keep better track of inventory and to re-stock racks more quickly, as well as a new means of communication between head office and stores, and technology to see how many store visitors make a purchase.

In online shopping, it will increase stock availability by allowing the use of apparel from physical stores.

TFG will be spending over 500 million rand ($35 million) over the next three-five years in these and other initiatives, Thunström said, and operating expenditure will be 250 million rand in that period.

In the full-year ended March, TFG reported a 19.6% rise in retail annual sales to 34.1 billion rand, boosted by acquisitions in the prior year combined with positive organic turnover growth across all businesses.

Online sales jumped by 57.2% and now accounts for 8.8% of group turnover.

The retailer, which sells clothes, jewellery, homeware and furniture, said TFG Africa, which accounts for 64% of group revenue, had comparable turnover growth of 5.6% boosted by Black Friday and December sales, while TFG Australia had 7.8% comparable growth. Sales in London grew 31.3% in pounds.

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“Against a backdrop of tough trading conditions and in an environment where the retail sector is facing significant disruption, all three business segments produced strong turnover growth in relation to their respective markets,” Thunström said in a statement.

$1 = 14.4438 rand
Reporting by Nqobile Dludla; editing by Jason Neely and
Alexandra Hudson


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