TFG eyeing 100 store closures amid more subdued year

The Foschini Group (TFG), the parent company of Hobbs, Phase Eight, and White Stuff, is planning to shutter 100 underperforming stores as it anticipates a “more subdued year” ahead.

In an interview with the Sunday Times, the South African company’s chief executive, Anthony Thunström, said around 300 underperforming stores had been identified across the portfolio, yet closures would only happen following efforts to improve performance. Which arm of the business these plans will impact was not detailed.

“Closing stores is absolutely the last resort after you’ve tried everything else,” Thunström said. “We look to see whether one of our other brands would perhaps trade better in that store, in that location.”

Ahead of permanent closures, TFG is looking at reducing floor space in some locations and potentially utilising them as online order hubs, responding to the strong performance of its online platform, Bash, which Thunström said complements in-store sales.

The company has also tightened cost control and lowered inventory levels as it seeks higher gross margins. Profitability, however, has remained resilient, despite pressure on the South African business.

Thunström said TFG’s sports division, and specifically its international branded footwear category, has weighed on performance due to market fluctuations, softer demand and excess inventory. This contrasts the company’s womenswear arm, however, with brands like Jet and The Fix driving sales growth.

While store closures are expected, TFG is also eyeing new between 80 and 90 new stores, building on its existing retail network of 4,914 locations across 18 countries.