One of Africa’s Largest Retail Giants to Shut More Than 100 Stores Despite Rising Sales
One of Africa’s biggest retail groups is embarking on a major restructuring programme that will see more than 100 stores closed over the next year, highlighting the profound transformation taking place across the continent’s retail sector.
South African retail giant TFG, the owner of leading brands including Foschini, Sportscene, Markham, Exact, Jet and @Home, has announced plans to streamline its operations after identifying nearly 300 underperforming or loss-making stores within its extensive network.
The move comes at a time when the company continues to grow its sales, demonstrating the increasingly complex realities facing modern retailers. While revenue climbed by 7.2% to R62.4 billion ($3.8 billion), profitability came under significant pressure. Headline earnings per share fell by 33.5%, while operating profit declined by 36% to R3.9 billion ($238 million), underscoring the challenge of turning higher sales into stronger financial returns.
According to TFG, difficult economic conditions, weak consumer spending, operational complexities and challenging trading environments in some international markets have weighed heavily on performance. The company noted that years of acquisition-led growth expanded its footprint but also increased operational complexity, making it more difficult to maintain efficiency and profitability.
Chief Executive Officer Anthony Thunstrom said the retailer is now shifting its focus toward simplification, cost reduction and improved store productivity rather than pursuing aggressive expansion. The strategy reflects a broader effort to build a leaner and more resilient business capable of adapting to rapidly changing consumer behaviour.
The announcement is particularly noteworthy because it contrasts sharply with the performance of some of South Africa’s other major retail players. Recently, Pepkor, the parent company of PEP and Ackermans, reported a strong performance, recording a 13.2% increase in revenue to R54.8 billion and a 10.3% rise in headline earnings.
Pepkor has continued expanding its physical presence, growing its network to more than 6,600 stores while also unveiling plans to launch a bank in 2027 as part of an ambitious expansion into financial services. Its success reflects the growing strength of value-focused retailing, as consumers facing prolonged economic pressure increasingly seek affordable products and services.
The contrasting fortunes of TFG and Pepkor reveal an important trend shaping African retail markets. Retailers serving lower-income and value-conscious consumers are gaining momentum as households become more cautious with spending. Meanwhile, fashion retailers operating higher up the value chain are facing increased pressure as consumers reduce discretionary purchases and become more selective about where they spend their money.
Beyond shifting consumer spending habits, TFG’s restructuring also highlights the growing influence of e-commerce. During its annual earnings presentation, the company pointed to the impressive growth of its Bash online platform, which generated more than R3.2 billion in revenue during the financial year.
Management revealed that Bash now delivers sales volumes equivalent to more than 300 physical stores, demonstrating how rapidly digital channels are transforming the retail landscape. The platform allows TFG to expand its reach while avoiding many of the costs associated with opening and operating additional brick-and-mortar locations.
The retailer believes its digital growth strategy will play a crucial role in offsetting pressure on physical stores while supporting future expansion in a more cost-effective manner.
TFG’s challenges also mirror wider difficulties facing South Africa’s fashion retail sector. Earlier this year, Truworths reported weaker sales across parts of its African operations despite the traditionally strong festive shopping season, reflecting ongoing consumer caution amid economic uncertainty.
For investors and industry observers, TFG’s decision to close more than 100 stores may not necessarily signal retreat. Instead, it reflects a growing recognition that success in modern retail is no longer determined by store numbers alone. Increasingly, retailers are being judged by the productivity of individual outlets, the strength of their digital platforms and their ability to adapt quickly to evolving consumer preferences.
As Africa’s retail landscape continues to evolve, TFG’s strategy suggests that future growth will be driven by efficiency, technology and smarter operations rather than simply expanding physical footprints. The company is betting that a smaller, more productive store network combined with a stronger online presence will position it for long-term success in an increasingly competitive market.
