TFG, the South African retail giant that owns the womenswear brand Phase Eight, could close as many as 400 stores across its broader portfolio as it implements a sweeping restructuring programme. While the company has already announced plans to shut more than 100 underperforming outlets, reports from South Africa’s News24 suggest the total number of closures may reach 400 to combat rising costs and shifting consumer habits.
Why is the retailer facing these potential closures?
The restructuring follows a sharp decline in profits and a significant shift in how customers shop. While traditional high street retailers struggle with mounting operating costs and sluggish consumer spending, digital revenue for the group has climbed by more than 30% over the past year.
Phase Eight is also grappling with the long-term decline of the department store model. The retailer cautioned that trading conditions in both London and Australia have been “more challenging than expected.”
How have shopping habits impacted the brand?
The collapse of Debenhams in 2021 dealt a major blow to Phase Eight’s business model, which previously relied heavily on department store concessions. This shift has coincided with the continued growth of online shopping, which is placing mounting pressure on bricks-and-mortar retail locations.
The impact of these changes is already visible in certain regions. Phase Eight recently confirmed the closure of its St Andrews outlet in Scotland, where a closing down sale is currently underway. The fashion chain has also previously shut stores in Dundee and Perth.
What may happen next for TFG and Phase Eight?
While TFG has not yet confirmed whether additional stores in the UK face closure, the company stated it will press ahead with a review of underperforming sites. This review is a central part of its wider restructuring drive to manage its broad portfolio of fashion, homeware, and lifestyle brands across Africa, the UK, and Australia.
Frequently Asked Questions
- How many stores could TFG potentially close?
While the company has already announced plans to close more than 100 underperforming outlets, reports indicate the total could reach as many as 400 stores across its broader portfolio. - What is causing the decline in Phase Eight’s performance?
The brand’s performance has been “heavily impacted over several years” by the decline of department stores and more challenging trading conditions in locations like London and Australia. - Is online shopping affecting these decisions?
Yes. The group reported that digital revenue grew by more than 30% over the past year, even as the company faces pressure to reduce costs in its physical retail locations.
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