TFG group CEO Anthony Thunström says Jet is one of the brands that have the highest potential for expansion.
- The Foschini Group says it will probably add at least another 200 Jet stores.
- But that’s likely to happen from 2022 to 2023 as the group’s focus right now is stabilising that business and opening Jet Home stores.
- TFG was supposed to acquire 381 Jet stores, but it ended up with only 150.
The Foschini Group says it plans to open 1 000 new stores in the next three years. While the expansion plan is not all about Jet, TFG group CEO Anthony Thunström said the group will “probably” add at least another 200 stores under that brand in the medium term.
But they will likely be small-format stores, as will be the case with new stores that the group will open for the other brands.
“Jet is definitely one of the brands that have the highest potential for expansion,” he said.
TFG was supposed to acquire 381 Jet stores. But it closed the deal with only 150 existing Jet stores. By the time the deal concluded, some of Jet’s landlords in the rural parts of SA were struggling because of Covid-19 lockdowns, and others wanted higher rental from TFG.
So, the group gave priority to profitable stores. But it kept all Jet staff and redeployed them to other stores and other brands within the TFG stable.
But as landlords continue to struggle and other retailers downsize their space, more landlords who didn’t play ball before are coming back to TFG to renegotiate.
“There are a lot of those negotiations taking place, and if you kind of map out the competitive footprint in the value space across South Africa, there are several hundreds of sites that we could use,” said Thunström.
But he added that the expansion of Jet is not a “burning priority” in this financial year. He said the business performed remarkably in its first year under TFG. So, the focus right now is to stabilise the brand and then roll out Jet Home stores.
“Once we’ve got past that, we’ve got the potential to open probably at least another 200 Jets,” said Thunström.
Why the re-birth of Jet Home?
TFG started rolling out Jet Home in just over 150 stores two months ago.
Thunström said by the end of TFG’s financial year in March 2021, the group will have opened at least ten standalone Jet Home stores.
If those “test” standalone stores perform according to the group’s expectations, it will likely roll out many more, taking on established players like Mr Price Home and PEP Home.
“The price point is the same as that of other value competitors, but in many cases, the quality is higher,” said Thunström.
Having a former Mr Price MD who oversaw Mr Home as the chief executive of Jet, Thunström said the retailer has a pretty good insight on what works to make homeware a successful venture in the lower LSM markets.
Jet also had a stab at this with its Jet Mart stores in the past. Thunström said Jet Mart was actually trading well but struggled to grow under Edcon.
Initially, Jet Home will focus mainly on “soft decorative” like cushions, linen and throws. It may add furniture later on.
With its expanding manufacturing capacity in SA, TFG will produce most of Jet Home’s merchandise locally.
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