The restructuring arrives as the major retail group battles sliding financial metrics, an aggressive store closure plan, and a share price that has more than halved over the past year.
TFG Restructuring and Section 189A Process Details
Staff at The Foschini Group Limited were notified of the restructuring process, which targets head office operations to reduce complexity and lower operating costs, according to Moneyweb. The group confirmed to Moneyweb that the process is underway but stated that store-level retail operations remain unaffected. It remains unclear whether manufacturing units for clothing and furniture will face adjustments. TFG stated that the consultations involve proposals rather than final decisions, with priorities focused on protecting employment and exploring internal redeployment.
Project Vela and Brand Stack Reorganization
The operational overhaul includes the TFG Africa retail division’s “Project Vela” program, which organizes brands into operating stacks to simplify structures and remove layers, as reported by wansom.ai. This strategy involves folding marginal brands into more efficient operating models. The restructuring also follows TFG’s 2022 acquisition of Street Fever, which integrated 114 stores with Sneaker Factory outlets and absorbed about 650 jobs, including roughly 50 head office roles. Wansom.ai notes that dealing with potential operational duplications from that purchase took more than three years.
Financial Pressures and Store Closures
TFG Africa faced mounting financial pressure during the financial year ending March 31, where retail turnover growth of 5% was outpaced by a 7.5% increase in trading and other expenses, according to wansom.ai. This margin compression dropped the gross margin from 42.6% to 41.6% and the EBIT margin from 11.7% to 7.1%. Compounding these pressures, the group aims to shut hundreds of unprofitable stores across South Africa, where it operated 3 432 of its 4 914 total outlets at the end of the financial year.
Market Performance and Share Price Decline
Investor response to these financial challenges has been severe, with TFG shares down 35% year-to-date and 51% over a one-year period, according to Moneyweb and wansom.ai. The company has shed 54% of its market value since a capital markets day held in August 2025, with steep drops following an October profit warning. Meanwhile, competing retailer Truworths has overtaken TFG as market missteps weigh on the group’s valuation.
Did you know? TFG operates around 40 brands across three markets, with the vast majority of its outlets concentrated in South Africa under its TFG Africa division.
Frequently Asked Questions
What is a Section 189A process?
Under South Africa’s Labour Relations Act, a Section 189A process governs large-scale retrenchments, requiring formal consultations between employers and affected employees or their representatives to discuss alternatives to job losses.
Are retail store employees affected by the TFG restructuring?
No. According to Moneyweb, the current restructuring process targets head office operating models and does not impact store-level retail operations.