The INSANE Rise of TFG

The Foschini Group is an investment holding company which operates independent chain-stores through the TFG Africa, TFG London, and TFG Australia segments.

TFG’s three business segments each have their own local management teams, which report into the group’s head office in Cape Town. Retail brands within these business segments are supported by centralised support services structures.

With a market capitalization of $1.93 billion, The Foschini Group employs over 46 566 across its 4697 outlets offering clothing, footwear, jewellery, sportswear, mobile phones and technology products,
homeware and furniture.

The company provides its products under the Foschini branded stores, Exact, Sportscene, Jet, The FIX, Hobbs, Phase Eight, American Swiss, Whistles, Connor, Fabiani, Johnny Bigg, Markham, Relay Jeans, its online ecommerce platform, BASH, and many more.

TFG has grown mostly through its corporate strategy, framed by the acronym, BOLTS. The strategy consists of four
strategic pillars, which are supported by an integrated sustainability imperative and philosophy.

The majority of TFG’s turnover is in the form of cash sales to customers, with the balance being from its very own in-house credit offering. Revenue is also generated
from interest received on customers’ store cards and through value-added services available to TFG Africa customers.

The Foschini Group’s diverse brands allow it to push boundaries of the retail industry in new and innovative ways to help achieve its main goal creating the most remarkable omnichannel experience for its customers.

In order for us to understand how TFG became South Africa’s biggest apparel retail holding company, let’s take a closer life of its founder, George Ivan Rosenthal.

He started out in clothing retail in America but became interested in other markets and his research showed that while South Africa was very much an underdeveloped country, it had a traditional fondness for American goods and know-how, and so he set sail for South Africa with little money, a lot of confidence and a grand plan.

When naming his company, he decided on an old Italian name, Foschini. He found that Johannesburg was one of the best shopping areas in South Africa and started leasing premises.

On 27 November 1925, the first Foschini store opened on Pritchard Street, Johannesburg, where it began by selling low-priced clothes imported from the US.

For the first time, South African women had access to fashion garments that were affordable, well-made, up-to-date, and accessible to a wider public.

He continued to expand the business and within two years after opening, Foschini had nine branches across South Africa. In 1941, Rosenthal registered Foschini Dresses Proprietary Limited on the Johannesburg Stock Exchange, the first clothing retailer to do so.

In 1958, Stanley Lewis, the son of Meyer Lewis who’s the founder of the Lewis furniture retail chain, bought a major shareholding in Foschini, which was then a struggling company suffering heavy losses. Over the ensuing years, he led and built Foschini into one of the leading retail chains in South Africa.

When he took control of Foschini, it was badly in need of a new imaginative and motivated approach. However By 1960s, the company had eliminated its losses and was nominated as one of the Financial Mail’s top 100 companies in 1966, a distinction which it has repeatedly earned as the years went by.

Under Stanley’s dynamic and entrepreneurial leadership, he devised an ambitious growth strategy based on rapid geographic expansion, product-line extensions, launching new brands in-house, as well as acquiring key businesses.

The group’s first major acquisition was made in 1967 when the American Swiss Watch Company was brought into the group. This was followed by Markham in 1968, Sterns in 1993, and Sportscene in 1996.

While in the process of making key acquisitions, the group also launched its own brands to the growing empire which started off with Exact initially as Pages in 1969, DonnaClaire in 1994, as well retail service provider, RCS, in 1999.

Having created omnichannel experiences for its customers, Foschini was now one of the leading fashion lifestyle retailer in South Africa by that time.

A philosopher once said that the six essential qualities of success are wisdom, imagination, sincerity, personal integrity, humility and charity.

Stanley Lewis was generously endowed with all these fine qualities and through these qualities, this quintessential retailer became such a respected and much loved leader of the group. People loved him because he was a team player who knew how to lead. He loved to play and watch sport and saw it as the ultimate in team work which he brought to his business life.

By the time he left the company in 1998 after a period of 40 years, Stanley Lewis’ name became synonymous with Foschini of which he held the positions of managing director and also chairman during the course of these years.

The next two decades were a roller-coaster blockbuster movie where TFG rose to the top of its industry chain after making more acquisitions, establishing new store brands, rebranding store brands, unbundling best performing in-store brands to become standalone businesses, badly performing brands being incorporated into businesses that were doing well, closing businesses that weren’t doing well, launching online stores for various subsidiaries, expanding presence in the SACD region, official renaming of Foschini Limited to TFG Limited, signing international franchise rights to sell in South Africa, losing those very same rights, selling off some of its businesses, inking strategic partnerships to tap into different markets and so much more.

The group’s online fashion and lifestyle platform, BASH dot com, was launched earlier this year to replace my TFG world. With over a million app downloads, BASH allows customers to shop for most of TFG’s in-house brands in one place.

The launch of Bash also saw the company rebranding its last-mile, in-house delivery service from Quench to BashDelivery.

Through its TFG London segment, the company went international for the first time in 2015 when it acquired Phase Eight in the UK for £238 million followed by Whistles and Hobbs divisions, which operate internationally in the retail sector across Europe, Asia, and North America.

Australian markets were entered in 2017 when the group bought menswear chain Retail Apparel Group for $220.4 million through its TFG Australia segment.

Retail Apparel Group or RAG was established in 1987 and has become a leading speciality menswear apparel retailer in Australia where it houses a balanced portfolio of core and emerging retail apparel brands and has established itself as a menswear player in the mid to value, fashion conscious speciality store segment in its local market. On top of that, it also has a small but growing women’s “athleisurewear” retail offering.

Expanding internationally enhanced the geographic diversification of the group by increasing its operating presence to many countries and gave it the opportunity to take certain brands outside Africa to the world.

As of 2023, TFG Australia accounts for 18.5% of the group’s total revenue, TFG London accounts for 13.3% percent while TFG Africa accounts for the remaining 68.5%.

Contrary to popular belief, TFG doesn’t source all its clothing from abroad, the company manufacturers its clothing at the TFG Prestige Clothing factories, which are located in Maitland, Epping, Durban and Johannesburg.

Prestige Clothing and its five plants owned by TFG are part of the R1 billion investment TFG has made into building capacity to make garments locally, a shift from the 20-year disinvestment in local clothing manufacturing by the country as a whole.

This R1bn investment has yielded great success, with substantially more locally made clothes in TFG’s stores, through Foschini, The FIX, Exact, Markham, Totalsports, and Sportscene, a far cry from the days when most stock was made in Asia because of lower costs and cheaper labour.

TFG’s quick response supply chain also supports six independent strategic factories. Together, Prestige Clothing and TFG’s non-owned strategic partners and auxiliary support businesses are projected to employ over 9000 people by 2026.

In the retail industry, where customer demands are constantly evolving, and competition is intense, supply chain management plays a pivotal role. Efficient supply chain management allows retailers to streamline operations, optimize inventory planning, minimize stockouts, and deliver products to customers in a timely manner.

TFG recognizes the significance of supply chain management and has made it a cornerstone of its business strategy. By implementing robust supply chain practices, TFG has been able to gain a competitive edge in the industry and create a unique value proposition for its customers. The company’s supply chain prowess is often cited as a key factor in its ability to offer everyday low prices and maintain a vast assortment of products.

TFG currently operates a national network regional general merchandise distribution centers in South Africa exceeding 113 250 square meters located in the Western Cape, Gauteng and KZN.

TFG distribution centers are instrumental in streamlining the order processing workflow. They receive store and customer orders, meticulously pick the products from their vast inventory, expertly pack them, and efficiently ship them to their destination.

Through effective retail strategies, including a diverse product range, strong brand presence, and customer-centric focus, TFG has became a force to be recogned with. Their ability to adapt to market trends, implement innovative marketing strategies, and maintain customer loyalty has contributed to their success in the retail industry.

With the aim of being the leading lifestyle retailer in Africa whilst growing its international footprint, the company is no doubt walking on the right path.

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