Phase Eight owner TFG has warned underperforming stores could close as it moves to cut costs across the struggling womenswear brand.
The South Africa-based retail group said it would “accelerate right-sizing” of Phase Eight’s footprint and costs over the next 12 months.
It did not disclose how many stores could be affected or which locations were under review.
TFG said Phase Eight’s performance had been “heavily impacted over several years” by the decline of department stores, which accounted for 70 per cent of the brand’s sales when it was acquired.
The fashion retailer’s St Andrews store has already launched a closing down sale, following previous closures in Dundee and Perth.
In its full-year results, TFG said trading conditions in London and Australia had been “more challenging than expected”, with macroeconomic conditions showing little improvement.
The group booked a £30 million impairment against the Phase Eight brand, reflecting lower long-term cash flow expectations.
TFG London, which also owns Hobbs, Whistles, White Stuff and Inside Story, reported a 29.4 per cent rise in sales to £488 million in the year to March 31, boosted by its acquisition of White Stuff.
However, excluding White Stuff, TFG London sales were flat at £296 million, while gross profit fell 6.5 per cent and trading expenses rose 5.6 per cent.
TFG said its legacy UK portfolio had been hit by weaker occasionwear sales, softer department store trading and disruption from a cyber incident affecting a key online concession partner.
The division’s EBIT before the Phase Eight impairment and White Stuff acquisition costs fell 65.4 per cent from £26 million to £9 million.
Across the wider TFG London estate, the group opened 48 outlets and closed 98 during the year, ending the period with 649 locations.
The retailer said its UK performance would remain dependent on disciplined margin and cost management as shoppers continued to face elevated living costs and weak consumer confidence.
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