Head office roles could be affected, but questions linger about manufacturing units.
Image: Supplied
Retail major The Foschini Group Limited (TFG), the owner of around 40 brands across three markets, has commenced a formal consultation process under Section 189A of the Labour Relations Act that could see retrenchments of some of its South African staff.
Staff were notified of the restructuring process last week, and TFG confirmed to Moneyweb that the process is under way.
Moneyweb understands that a number of roles at its head office could be affected but that this process does not impact its store-level retail operations.
It is entirely unclear whether any of its sprawling manufacturing units across both clothing and furniture will be affected.
‘Protecting employment’
In response to questions from Moneyweb, TFG said only that it “has been reviewing part of its Head Office operating model to reduce complexity and structurally lower our cost of doing business, in line with the group’s strategic objectives”.
“Where roles are affected, we always follow a consultation process in terms of Section 189 of the Labour Relations Act. These are proposals, not decisions, and we will follow the appropriate due process.
“Employees who may be affected are engaged directly, and any alternatives they raise are fully and properly considered,” it said.
“Our priority is to protect employment wherever possible, including redeployment into suitable roles across the group.”
TFG did not directly address any of Moneyweb’s questions, including those related to how many roles and/or which functions may be impacted.
It hinted at this eventuality in its annual report, saying that the “strategic actions” it is now “implementing go further: tight control of capex and inventories, an aggressive reduction in structural operating expenses and further cutting corporate overheads now that the build phase is reaching completion”.
Organising brands into ‘stacks’
In its TFG Africa retail business, its Project Vela programme will “organise brands into operating ‘stacks'”, which “will simplify structures, remove layers and improve agility, with marginal brands folded into more efficient operating models”.
Moneyweb understands that the Section 189A process is, in part, related to the 2022 acquisition of Street Fever, which saw it combine that brand’s 114 stores with its fast-growing Sneaker Factory outlets.
At that point, it ‘absorbed’ about 650 jobs from that independent retailer, of which no more than around 50 would’ve been traditional ‘head office’ ones.
The real question is why it has taken TFG more than three years to deal with potential duplications arising from this purchase.
It has an extensive ‘Sports and Lifestyle’ brand portfolio, anchored by Sportscene and Totalsports. Along with this, it has opened JD Sports stores under licence from the UK brand, and it operates the niche youth-focused Archive brand.
Sneaker Factory targets the value segment and was specifically acquired to allow TFG to extend its penetration lower down into that market.
TFG Africa under pressure
Within TFG Africa, ‘Sports’ accounts for just more than 20% of sales, making it the largest contributor among divisions.
TFG’s Africa unit is under intense difficulty. In the last financial year (to 31 March), its retail turnover grew by 5% while its trading (and other) expenses increased by 7.5%.
This saw its gross margin decline to 41.6% (from 42.6%) while its Ebit [earnings before interest and taxes] margin fell to 7.1% (from 11.7%).
TFG share price
Its share price has reflected this pressure with shares down 35% so far this year.
Over one year, its share price has more than halved (down 51%).
Since the start of its, in hindsight, disastrous capital markets day in August 2025 (technically two days), it has shed 54% of its market value, with the big drop coming in October after it published a profit warning where practically every metric was in the wrong direction.
Over the last 30 days, shares are up 7%.
Closing unprofitable stores
It continues to pursue an “aggressive” closure of unprofitable stores in South Africa, in which it has the vast majority of outlets in the TFG Africa division.
At the end of the financial year, it had 3 432 of its total 4 914 outlets in South Africa. It aims to shut “hundreds” of unprofitable stores as part of this reset.
This article was republished from Moneyweb. Read the original here.
