SA retail giant to close hundreds of stores in cost-cutting drive

Clothing retail

Cape Town – A major South African retail group has warned of continued pressure in the sector as it reported a sharp drop in earnings and moved to cut its dividend.

The Foschini Group (TFG) posted a 33.5% decline in headline earnings per share for the year ended 31 March 2026, alongside a 39.1% reduction in its final dividend, Business Explainer reported.

The company said results were hit by “deteriorating trading conditions across all three of its major markets” and more than R1 billion in non-cash brand impairments.

Group CEO Anthony Thunström said the business had been forced to respond to difficult trading conditions, noting that “the group responded decisively to external pressures, citing cost reductions, inventory management, and cash preservation as the key levers pulled during a difficult trading period.”

According to Daily Investor, in addition to its weak earnings, TFG is also restructuring its store footprint, with reports that the retailer is reviewing hundreds of locations and plans to close underperforming stores across South Africa as part of a wider global optimisation drive. The move reflects growing pressure on traditional brick-and-mortar retail as consumers shift spending patterns and online sales continue to rise.

The closures form part of broader cost-cutting and efficiency measures as the 102-year-old retailer adapts to slower growth in key markets and increasing competition from value-focused chains.

Despite the challenges, TFG said digital sales remained a bright spot, with online channels continuing to grow strongly across its portfolio.

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