Warning to top South African fashion retailer closing stores

The Foschini Group (TFG) has been warned by the Congress of South African Trade Unions (COSATU) to consider the impact of its planned store closures on its staff. 

TFG told investors on 2 September that it has already closed 85 of its stores in the first half of its financial year, with 400 closures planned in total. 

This is due to the underperformance of its stores relative to its Bash online offering, which continues to grow strongly. 

TFG has also struggled to compete with imports from fast-fashion giants Shein and Temu, as its sales growth has not kept pace with inflation. 

It has been explained that it plans to close hundreds of loss-making stores to reduce the cost of doing business and improve the efficiency of its store portfolio. 

In its previous financial year, TFG closed 242 stores in Africa and its global operations. On 2 September, it said another 85 had been closed. 

TFG said there are a further 80 stores that are likely to fall within closure parameters during the 2027 financial year, and another 100 stores during each of the following two financial years. 

“This consolidation is expected to enhance both profitability and return on capital,” the group said.

These store closures have drawn the attention of South Africa’s largest trade union, COSATU, which issued a warning to TFG on 3 September. 

“COSATU calls upon TFG to earnestly consider the impact of store closures on its staff following the announcement to cease operations of 280 African outlets in the next three financial years,” the statement said.

“These planned closures come at a time when artificial intelligence and automation are contributing to the drivers of retrenchments.” 

COSATU said workers are often left without adequate compensation or measures to accommodate them in this environment. 

“Behind TFG’s popular brands, Foschini, Sportscene, and Markham, are hard-working individuals. The business is where it is today due to the blood and sweat of its staff,” COSATU said. 

“The billions it accumulates in sales are due to the toil of workers from operating sewing machines to the sales consultants at stores.”

The union said its affiliates will work to stop this devastating blow to workers across the African continent and find progressive alternatives. 

“It is vital that TFG demonstrates solidarity towards its workforce, engages in good faith and finds alternatives to store closures,” COSATU said. 

“Throwing workers into the devastating unemployment den should not be the pinnacle of decision-making and solution-finding processes.” 

TFG’s financial performance

TFG’s financials do not make for pretty reading as the company’s sales come under pressure at home and abroad in Australia and the United Kingdom. 

The retailer’s trading update for the 21-week period from 29 March to 22 August 2026 revealed 0.2% sales growth, far below inflation. 

Its flat sales growth was driven by a 3.4% rise in TFG Africa sales and a 2.3% rise in TFG London sales. 

However, its Australian business came under significant pressure, with sales falling 4.7% in what TFG describes as its toughest trading environment in history. 

It attributes the difficult environment to geopolitical shocks. The Australian businesses have also been impacted by the repositioning of its Tarocash brand. 

The only bright spot for the company is its online Bash platform, which grew sales by 54.1%. It now accounts for 15.9% of all of TFG Africa’s sales. 

TFG is increasingly betting on Bash and its other digital channels to turn the company’s fortunes around, with it no longer investing heavily in its store footprint. 

The retailer’s challenges have not only been external. It has also pursued an aggressive acquisition strategy in recent years. 

This strategy aimed to diversify its brand portfolio and improve resilience, alongside accelerating its digital transformation. 

The strategy saw TFG acquire Street Fever, White Stuff, JD Sports, Granny Goose, Coricraft, Volpes, Dial-a-Bed, and The Bed Store. 

While the acquisitions boosted the retailer’s top-line growth, they came at a severe cost to TFG’s profitability. 

To fund its ongoing string of acquisitions, TFG has had to take on higher levels of interest-bearing debt, which has led to the retailer’s finance costs skyrocketing.

TFG’s total finance costs have nearly tripled over the past five years, going from R783.8 million in the 2022 financial year to R2.05 billion in 2026.

The acquisitions have also exposed TFG to severe brand impairments, with the retailer having incurred a devastating R1.02 billion write-down in 2026.

In many ways, the string of acquisitions covered up the retailer’s stagnant organic growth.