High consumer confidence has pushed Foschini Group sales ahead of budget for the first five months of its new financial year and the outlook for the remainder of the year is positive, Foschini Group Chairman, Eliot Osrin, told the Annual General Meeting in Parow.

He said the retail environment continued to experience solid growth on the back of lower interest rates and lower inflation, and consumer spending was expected to remain strong.

Reflecting on the past five months of trading, Osrin said total sales exceeded budget and have grown by 20,5% over the previous year, with clothing up by 16,3%, jewellery sales up by 15,7%, cosmetics up 33,3% homewares up by 30,9%, and cell phones up by 69,0%. Sales in comparative stores have increased by 15,2%. In addition, the financial services division continues to grow very satisfactorily.

Foschini’s past year was the best year ever for the group. It achieved phenomenal growth of 51,7% in headline earnings per share, following compounded growth over the previous three years of 60% per annum.

He highlighted some of the achievements of the past year which include record sales of R5,3-billion, an increase of 19,7% over the previous year and an operating margin of 22,7% which exceeded 20% for the first time. Its annual dividend increased by 74,5%. It achieved an increase in net profit before tax of 51,6%, achieving pre-tax income at R1,1-billion, for the first time exceeding the billion rand figure.

But, the group is not resting on its laurels. It has continued with its strategy of re-inventing, extending and revitalising its brands and has unveiled two new trading formats that will provide ongoing growth and diversification for the group in the future. Early in November the group’s @home division will open 2 new large lifestyle stores to be called @homelivingspace, offering a range of furniture in addition to its current @home product offering.

The Foschini division will be launching an additional new brand towards the end of this calendar year named LUELLA, which will offer a range of ladies footwear, handbags and accessories aimed at the middle to upper middle market. An exciting new store format has been developed and 6 new stores will be opened in major shopping centres in October 2005.

Foschini announced this week a partnership with Standard Bank, whereby Standard Bank will acquire an initial 25% of RCS Investment Holdings with options to acquire an additional 20% in the future. As a partner, Standard Bank will be able to assist in RCS Investment Holding’s growth opportunities, and its involvement in areas such as treasury and product development will add value to the RCS business and assist in realising future growth opportunities.