Major retailer in South Africa closing 280 stores
The Foschini Group (TFG) plans to close about 280 stores in Africa through 2029 as the retailer focuses on online sales, which are outpacing its physical operations.
The Cape Town-based company, which also has operations in the UK and Australia, said about 80 outlets would fall within its closure parameters in the year ending in March.
It added that 100 additional exits are being considered in each of the following two fiscal years.
Foschini closed 85 shops it deemed no longer economically viable in the 21 weeks through 22 August 2026, it said on Wednesday.
This was offset by the opening of 25 new stores during the current period.
In a trading update on its operations for the 21 weeks ended 22 August, TFG recorded group sales rising by just 0.2% to R23 billion.
While sales at its physical African stores rose 0.2% in the period, sales online surged 54%.
This was driven by the Bash platform Foschini uses for its brands, including Sportscene, Totalsports, Markham, Fabiani, @home, American Swiss and Exact.
“Globally, the consumer is expected to remain under pressure in the near term,” Foschini said.
It added that it will maintain “a disciplined approach to credit extension and space optimisation, while continuing to focus on growing online penetration.”
Retailers in South Africa, Foschini’s biggest market, are navigating a shopping landscape in an economy that has expanded at less than 1% annually on average for more than a decade.
Chronic unemployment has resulted in consumers seeking more value for their money.
Group online sales now contribute almost 16% to total sales compared with about 14% a year earlier, Foschini said.
The retail group has more than 3,400 stores in South Africa.
Looking ahead, TFG said that, globally, consumers are expected to remain under pressure in the near term.
“Management will maintain a disciplined approach to credit extension and space optimisation, while continuing to focus on growing online penetration. The outlook remains cautious,” it said.
(With Bloomberg)
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