Phase Eight owner could close 100 underperforming stores globally

TFG, the South African retail group that owns Phase Eight, Hobbs, Whistles and White Stuff, could close more than 100 underperforming stores globally this year as it moves to cut costs following difficult trading conditions in the UK.

TFG CEO Anthony Thunström said in an interview with The Sunday Times that the group had identified 300 underperforming stores across its international portfolio but saw closures as a "last resort" and would only proceed after other efforts to improve performance.

Thunström did not confirm how many of these stores were located in the group's UK region.

His plans include reducing the retail footprint to make space inside stores for online order hubs, following an increase in online sales across the group.

In its latest financial statements, the group reported 31.7% growth in online sales across regions, with online revenue now making up 14.8% of total retail sales.

The group's full-year 2026 results, published on 6 June, showed that in the UK, sales excluding White Stuff, which it acquired in 2024, remained flat, as the "UK continued to experience difficult trading conditions".

Including White Stuff, which continued to perform well, UK sales increased by 29.4% in the full-year 2026 period.

The group reported a 65.4% decline in segmental EBIT before impairment of Phase Eight and acquisition costs in the prior year.

It cited the UK's "challenging retail environment" as a key reason for the results, adding that "discretionary consumer demand constrained by elevated living costs and subdued consumer confidence" had impacted sales.

TFG noted that in the UK the performance of its legacy portfolio, including its Phase Eight brand, was further impacted by weakness in occasion-wear categories, softer department store trading and disruption arising from the significant John Lewis cyber incident.

As a result, the group has lowered its performance expectation of the Phase Eight brand.

TFG CEO Anthony Thunström said the group was focused on strengthening business resilience in the face of expected continued adverse trading conditions.

"FY26 was a challenging year as weaker consumer demand and margin pressure impacted profitability across the group. While these conditions were largely outside of our control, our response was not. We acted decisively to reduce costs, manage inventory, preserve cash and strengthen the resilience of the business," he added.

"We have invested significantly over a number of years to build scaled retail, digital and logistics platforms that position us well for the future. As online penetration continues to grow and our omni-channel capabilities scale, we believe we are increasingly able to drive growth through a more capital-light model while remaining focused on improving profitability and returns."

The group has been experimenting with new retail layouts recently. In April, TFG London opened its first tri-brand outlet store at The Boulevard in Banbridge, Northern Ireland, bringing Phase Eight, Hobbs and Whistles together in a single 3,851 sq ft location.