May 27, 2010
Foschni full-year profit falls, sees uptick in demand
May 27, 2010
JOHANNESBURG, May 27 (Reuters) - South Africa's second biggest listed apparel retailer Foschini (FOSJ.J) posted a 6.3 percent fall in full-year profit hit by lower consumer demand, which it expects to improve in the coming year.
Foschini, which runs stores chains of the same name and Markhams, said on Thursday 27 May headline earnings per share fell to 521.4 in the year to end-March compared with 559.5 cents a year earlier.
Retailers in Africa's biggest economy, which emerged from a recession in the third quarter of last year, have been squeezed as their customers battle with unemployment and high debt.
But a series of interest rates cuts and a gradual economic growth has prompted some to make upbeat calls about this year's demand.
South Africa's retail sales rose more than expected in the year to March, ending 13 straight months of contraction and suggesting consumer demand is catching up with a broader economic recovery.
Foschini, whose customers are mostly in the middle class space, said sales for the first eight weeks of the 2011 financial year showed an upward shift in consumer spending and plans to open around 100 stores this year to benefit from an expected upturn in demand.
Retail sales were up 6.4 percent to 8.6 billion rand ($1.12 billion), lagging its rival budget clothing retailer Mr Price (MPCJ.J), which boosted sales by 15.6 percent and profit by 21 percent earlier this week.
Shares in the company, which have gained 6.63 percent so far this year, were down 0.15 percent at 64.50 rand as of 1228 GMT.
(Reporting by Tiisetso Motsoeneng; Editing by David Dolan)
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