Retail group TFG plans to close 100 underperforming stores and reduce inventory purchases as it anticipates another subdued year locally.
Group CEO Anthony Thunström said the retailer had identified about 300 underperforming stores across its portfolio, and that closures will only happen after every effort had been made to improve performance.
“Closing stores is absolutely the last resort after you’ve tried everything else. We look to see whether one of our other brands would perhaps trade better in that store, in that location,” he said.
While some categories struggled, others significantly outperformed. Foschini, Jet and The Fix helped drive women’s wear sales and beauty sales surged, particularly within Jet, said Thunström.
The retailer will reduce floor space in some stores and use them as hubs for online orders, following the strong performance from online platform Bash, which now contributes 10% of local sales.
“We’re finding that you can actually serve your customer better and be more profitable by not necessarily having as big a store as you had before, providing you’ve got Bash to complement it.”
He expects Bash to contribute 15% of turnover within the next two to three years.
The retailer is also maintaining tight control over costs as it anticipates another tough trading period.
“We’ve anticipated a more subdued year. We’re buying less than last year.”
A major contributor to the weaker performance in the year under review was TFG’s sports division — particularly internationally branded footwear, hit by softer consumer demand and excessive inventory.
“You have to order branded footwear nine months before you sell it,” Thunström said, adding that sportswear was “very cyclical”.
He added: “You’ll have a couple of years where everybody wants branded sports clothing and footwear ... [followed by] a year or two where there hasn’t been a lot of innovation. People then don’t want to buy ... what they could have bought last year.”
Thunström said the 2026 financial year “was a challenging year as weaker consumer demand and margin pressure impacted profitability across the group. While these conditions were largely outside our control, our response was not.
“We acted decisively to reduce costs, manage inventory, preserve cash and strengthen the resilience of the business.”
He said the group invested significantly over a number of years to build scaled retail, digital and logistics platforms that position it well for the future.
“As online penetration continues to grow and our omni-channel capabilities scale, we believe we are increasingly able to drive growth through a more capital-light model while remaining focused on improving profitability and returns.”
Looking ahead, TFG expects trading conditions to remain tough across its key markets. — Business Times