 |
RETAIL TURNOVER |  |
| R1 750,0m | ||
| NO. OF STORES | ||
| 324 | ||
|
TFG SPORTS DIVISION
THE SPORTS DIVISION CONTINUES TO OCCUPY A LEADING POSITION IN ITS SPACE IN THE RETAIL SECTOR.
POSITIONING
TFG Sports comprises the Totalsports, Sportscene and Duesouth chains. Most of the stores of these chains are to be found in major shopping centres and high streets throughout South Africa. Totalsports is the largest chain in turnover and number of stores.
Totalsports focuses on football, running, fitness and rugby, with a broad range of apparel, footwear and equipment for these sports and selected items for others. It is the premier sportswear retailer in the country, stocking the products of leading branded suppliers such as Nike, Adidas, Puma and Asics, complemented by own-brand Fusion sports lifestyle products.
The Sportscene chain offers a blend of street-credible sports and fashion brands, including in-house brand, Redbat. These labels appeal to a youthful and fashion-conscious market in which tastes and trends change rapidly.
The Duesouth chain caters for modern high-tech outdoor enthusiasts who prefer to shop in a specialised modern retail space suited to their lifestyle, where they find apparel, footwear, equipment and accessories for the outdoors. This chain targets the mid- to upper-income groups.
REVIEW OF THE YEAR
The division had a successful year, achieving overall turnover growth of 16,9% and same store growth of 9,9%. These results confirmed the division’s ability to maintain its position as a market leader. Same store growth in the first half was 11,6% and in the second half 8,3%.
In total 34 new stores were opened.
The division’s mark-downs have remained well controlled and at acceptable levels which are now in the single digits.
Turnover received a significant boost in the period of the 2010 FIFA World Cup™ tournament, particularly in the Totalsports chain.Further progress has been made in the implementation of the group’s supply chain initiative, which aims to increase the efficiency of the group’s operations through increased speed and flexibility in the supply and distribution of merchandise. Good supplier relationships are now entrenched and were enhanced with the key branded suppliers by being their partner of choice during the 2010 FIFA World Cup™ tournament.
Usage of new merchandise systems are continually improving, resulting in benefits.
Market share in branded footwear increased significantly from 19,4% to 25%.
| 2011 | % change | 2010 | ||
| Turnover (R million) | Totalsports | 1 053,7 | 19,9 | 878,5 |
| Sportscene | 565,1 | 10,5 | 511,4 | |
| Duesouth | 131,2 | 22,8 | 106,8 | |
| Total | 1 750,0 | 16,9 | 1 496,7 | |
| Number of stores | Totalsports | 169 | 14,2 | 148 |
| Sportscene | 124 | 8,8 | 114 | |
| Duesouth | 31 | 6,9 | 29 | |
| Total | 324 | 11,3 | 291 | |
| Floor area (gross m2) | Totalsports | 45 516 | 16,0 | 39 226 |
| Sportscene | 28 961 | 9,6 | 26 436 | |
| Duesouth | 9 675 | 6,0 | 9 128 | |
| Total | 84 152 | 12,5 | 74 790 | |
| Number of employees | 2 719 | 2 144 | ||
| Most significant countries from which merchandise is imported | China | China |
| Mark-down statistics | |||||
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Mark-down value (Rm) | 133,8 | 160,8 | 152,0 | 176,2 | 193,6 |
| % to sales | 11,1 | 12,3 | 10,3 | 10,3 | 9,8 |
TOTALSPORTS
Totalsports achieved turnover growth of 19,9% for the year, with same store growth of 11,3%. The expansion policy continued with the opening of 21 new stores. Several stores were relocated and or enlarged.
A strategy has been implemented to off-set the once-off nature of the turnover derived from the 2010 FIFA World Cup™ tournament. This includes introducing new product categories and expanding existing categories, with the key opportunity areas being childrenswear, men’s and women’s apparel, equipment and technology. This strategy continues to provide rewards.
A start was made on a long-needed revision of the format of the Totalsports stores and the image which they project. The logo, the store look and feel, and the in-house brand, Fusion, are being modernised.
SPORTSCENE
Sportscene achieved turnover growth of 10,5% for the year, with same store growth of 5,8%. The expansion policy continued with the opening of 11 new stores. One store was closed.
Sportscene benefited from the 2010 FIFA World Cup™ tournament through sales of football lifestyle products from the big sports brands. The lack of newness from the big brands in their other product and the down-trending of surfing as a category hampered sales during the year. Own-brand Redbat products grew well, particularly in accessories where sales exceeded expectation.
The ongoing roll-out of the newly-revitalised Sportscene stores continued with 12 new-format stores. These stores consistently yield sales growth in excess of the chain’s average. Smaller Sportscene stores, primarily offering footwear, are being opened as second stores in large malls and in new locations where there is opportunity. Two of these stores have been opened to date and are trading above expectation, and a further 46 potential sites have been identified.
DUESOUTH
The chain’s turnover grew by 22,8% with same-store growth of 16,3%. Two new stores were opened, with a total of 31 stores trading at the year-end.
An expanded range in both camping equipment and picnic gear was introduced in the summer, resulting in excellent growth in these categories. The reintroduction of key strategic lines in navigation was well received and led to significantly increased sales. The outdoor accessory range was also expanded and this too was popular with customers.
The 2010 FIFA World Cup™ tournament event provided a significant boost for sales of winter products in June and July. The introduction of additional media opportunities such as Duesouth TV resulted in greatly increased participation in own-branded events.
STRATEGY
The continued roll-out of the new, revitalised brand format will be a key focus for Totalsports. This project includes an update of store fronts in existing stores, introducing new layouts in certain stores, and providing new marketing material to all the stores in the chain. This strategy is expected to increase the chain’s standing in the eyes of the market and to maintain the goodwill gained from the 2010 FIFA World Cup™ tournament.
Larger format stores are being sought with the objective of stocking greater product ranges. The first store in this format will open its doors in January 2012.
Cellular products are being introduced in Totalsports in the next year.
Totalsports will ensure that it remains close to its customers by participating in local sports events and national event sponsorship. The popular Totalsports Women’s Road Race will now take place in three cities for the first time and will bring about added awareness in the market-place. In addition, Totalsports has now partnered with Virgin Active and Adidas to exploit opportunities in the fitness area.
In the Sportscene chain, the continued roll-out of the new brand format will increase store performance following its successful introduction in 2010.
Duesouth will continue to seek further sites, including some in partnership with Totalsports, to create an emporium in which the offerings of both chains are available to customers.
Sponsorship of the Duesouth Xterra Multisport event continues and includes a Duesouth television programme. Key international sport ambassadors have been contracted to further the brand personality.
The division will again participate actively in the group’s supply chain initiative with the objective of bringing products into the stores still faster than at present, and thus improving efficiency and raising stock turn.
Good expansion opportunities have been identified throughout southern Africa and the division intends to open 42 new stores in the new year. Of these, 21 will be Totalsports stores, 16 Sportscene and five Duesouth stores. Opportunities for further space acquisitions in good locations are being pursued.PROSPECTS
Despite being up against significant 2010 FIFA World Cup™ tournament sales, turnover growth will be achieved through a combination of new store growth, the introduction of additional product lines and exploitation of current product lines.
Store statistics
| Current | Projection | ||||||
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | |
| Totalsports | 106 | 112 | 134 | 148 | 169 | 190 | 210 |
| Sportscene | 86 | 90 | 105 | 114 | 124 | 140 | 160 |
| Duesouth | 16 | 19 | 25 | 29 | 31 | 36 | 41 |
| Total No. of stores | 208 | 221 | 264 | 291 | 324 | 366 | 411 |
| Franchise stores | 1 | 2 | 2 | −* | − | − | − |
| Closures | − | 3 | 2 | − | 1 | − | − |
| Floor area (m2) | 48 858 | 54 338 | 67 325 | 74 790 | 84 152 | 92 632 | 100 982 |
| * Now consolidated | |||||||