Phase Eight dents TFG London performance, but White Stuff is a boost

TFG London, the UK arm of the South African retail group, has reported a £21 million operating loss for the year to 31 March with Phase Eight problematic as sales proved tough. But it saw strength at the acquired White Stuff business.

As part of the South African parent’s annual results filing, the company said UK retail turnover was up 29.4% to £488 million, but with White Stuff taken out of the mix, the resulting £296 million sales figure meant no growth at all. The company had acquired White Stuff during the financial year (in October 2024) and that brand’s sales rose 4.3% on a pro-forma basis to £192 million, although gross profit edged down by 0.9% to £110 million.

Gross profit at TFG London overall rose 19.8% to £296 million but the gross margin was down to 60.7% from 65.5%. With White Stuff excluded, gross profit was down 6.5% at £186 million. 

Operating profit fell by 65.4%. The company booked a non-cash impairment charge relating to Phase Eight, leading to a divisional operating loss of £21 million, a big difference to a £23 million profit the year before.

The UK business was hit by a tough market for occasionwear, department store partners seeing weak demand and the cyber incident at important online concession partner M&S.

During the year the company continued rightsizing its store portfolio and closed 98 stores while only opening 48.

As for the current year, it warned that consumer confidence is near Covid lows with inflation set to rise and department stores remaining under pressure.

It said it has three “quality brands” — Hobbs, White Stuff and Whistles — but Phase Eight wasn’t included in that description. It’s now restructuring that brand and will accelerate the “rightsizing” of its footprint and costs within 12 months.

But there were some promising signs for the company overall and for the post-March period, it also said TFG London sales fell 3.6% in April but rose 8.9% in May.