South Africa’s retail powerhouse, The Foschini Group (TFG), is tightening its belt after reporting a sharp decline in profits. Despite revenue growth, weak consumer demand and erratic sales patterns have forced the company to announce cost-cutting measures, including store closures and inventory adjustments.
TFG revealed that headline earnings per share fell 21.3% to 292.6 cents for the six months ending 30 September 2025. Operating profit dropped nearly 10% to R2.3 billion, even though group revenue rose 12.2% to R31.4 billion.
The decline was driven by:
- Erratic monthly sales, heavily influenced by payday spending.
- Weak winter clothing demand, leading to deeper markdowns.
- Sticky inflation and slow interest rate cuts across South Africa, the UK, and Australia.
To stabilize performance, TFG CEO Anthony Thunstrom announced plans to:
- Close underperforming stores across its portfolio.
- Review inventory commitments to avoid overstocking.
- Expand local manufacturing, particularly in women’s denim and menswear.
- Invest further in digital channels, with online sales surging 55% year-on-year.
TFG operates in South Africa, the UK, and Australia, with well-known brands such as Markham, Jet, @home, Sportscene, and Totalsports. While its acquisition of UK fashion chain White Stuff in 2024 boosted revenue, trading conditions remain challenging across all regions.
- Interim dividend reduced from 160 cents per share to 130 cents.
- Share price slipped over 2%, trading at R88.30 after the announcement.
- Basic earnings per share fell 21.2% to 290.8 cents, reflecting the pressure on profitability.
TFG’s struggles mirror broader challenges in the retail industry:
- Consumers remain under financial strain due to inflation and high interest rates.
- Retailers must adapt by streamlining operations and focusing on value-driven offerings.
- Technology and data analytics are becoming essential for forecasting demand and optimizing inventory.
For South African technology and business readers, TFG’s situation highlights the growing importance of:
- E-commerce growth as a lifeline for traditional retailers.
- Local manufacturing supported by supply chain technology.
- Data-driven decision-making to anticipate consumer trends and reduce costly markdowns.
