TFG buys Tapestry Home Brands for R2.35bn

Listed fashion retailer, The Foschini Group, has made a significant move in the retail market with the acquisition of Tapestry Home Brands for R2.35 billion. This strategic deal marks a pivotal moment for TFG as it expands its home brand offering, positioning itself as a key player in the furniture and homewares segment. In an exclusive interview with CNBC Africa, Chief Executive Anthony Thunström shed light on the details of the acquisition and the potential impact it will have on TFG's future growth and development. Thunström highlighted the significance of the deal, stating that it would nearly double TFG's existing homewares and furniture business, making it a more substantial contributor to the South African operations. With Tapestry's strong vertical integration and local manufacturing capabilities, TFG aims to leverage synergies and economies of scale to enhance its production capacity and improve its working capital cycle. By investing in local manufacturing and expanding Tapestry's production capabilities, TFG is not only looking to drive operational efficiency but also create new job opportunities, with plans to double their production capacity and potentially add more shifts to meet the growing demand. Thunström emphasized the positive impact on employment, stating that the acquisition of Tapestry would bring approximately 2,500 jobs to the South African economy. In terms of store expansion, TFG has ambitious plans to grow its footprint, starting with doubling Tapestry's current store count of 175 to potentially over 350 in the near future. While the focus remains on South Africa for now, there are discussions about expanding into other African countries in the long term. Thunström mentioned that TFG's expertise in African expansion and operations puts them in a strong position to explore new markets and capitalize on the growing demand for home brands across the continent. One of the key strategies post-acquisition is to enhance Tapestry's retail operations by leveraging TFG's existing infrastructure, especially in credit services and e-commerce. With TFG's successful track record in online retail and credit sales, Thunström sees significant growth potential for Tapestry in these areas, aiming to replicate the success of TFG's current home furniture business, which already accounts for over 20% of sales online. Looking ahead, Thunström outlined TFG's vision for category composition, emphasizing the company's commitment to diversification and organic growth. He highlighted plans to invest behind existing brands, including Tapestry, and expand the store network by opening up to 1,500 new stores in South Africa over the next three years. This bold move signals TFG's serious intent to dominate the home brands segment and solidify its position as a leader in the retail market. With a clear focus on expansion, innovation, and customer-centric strategies, TFG is poised for significant growth and success in the years to come.