Buying back your own shares is meant to be a vote of confidence. For The Foschini Group, the owner of Foschini, Markham and Sportscene, it has so far been an expensive lesson in timing. In September and October 2025 the retailer ran the first share buyback in its history, spending R1 billion to snap up about 3% of its stock at an average of R105.87 a share, arguing the shares were trading below what the business was really worth. It kept buying even as the price fell, picking up 3.4 million shares at an average R110.17 by the end of September before repurchasing the rest at R102.96.
The price went the wrong way
Ten months later the share price has been languishing just above R50, its weakest since 2010, before recovering about 9% over the past fortnight to around R55. That leaves the repurchased shares worth roughly R553 million today, close to half what TFG paid for them. The buyback was funded with debt, and the group borrowed over R1 billion to do it. At an effective interest rate of about 8.1%, that borrowing costs around R58 million in interest every year, roughly 18 cents per share, for as long as the debt sits on the books.
A modest upside, a lasting cost
There is a benefit, but a small one. The buyback lifted headline earnings per share by about 10.7 cents, to 675.4 cents, because profit is now split across fewer shares. The catch, as chief financial officer Ralph Buddle admitted, is that the jump in the group's net debt can essentially be blamed on the buyback itself; without it, net debt would have risen only about R135 million rather than more than R1.1 billion. TFG has not cancelled the shares; it is holding them as treasury stock in a subsidiary, with no stated plan for what to do next.
Buddle says TFG will not rush into more buybacks while it would rather cut debt, which tells you how the lesson landed inside the business. With net debt of R8 billion at the end of March and close to R3 billion due over the next three years, whether the bet eventually pays off depends on one thing the company cannot control: the share price climbing back above the R106 it paid.
