Australian menswear brands Tarocash and YD will likely require non-cash impairments amid revenue slips over the current financial year.
The brands’ parent company The Foschini Group, based in South Africa, shared the news in a trading update, adding that another brand in its London trading market – Phase Eight – will require a partial impairment. This comes as trading conditions prove more challenging than anticipated with macroeconomic conditions showing little improvement.
“Reflecting the more challenging outlook, our revised assumptions have required a reassessment of forward-looking cash flows and recoverable values,” the company shared. “Accordingly, the group expects to recognise non-cash impairments in the current period. These brand impairments may be reversed in future periods should trading conditions improve.”
For Tarocash and YD, TFG confirmed that both brands remain profitable, but noted that current weak trading conditions as well as the transfer of Tarocash’s traditional “big and tall” business to the group’s Johnny Bigg label has led to likely impairments.
TFG added that the Australian business continues to generate EBITDA significantly above the A$43 million recorded when it was first acquired in FY2018, generating A$94 million in FY2025.
The impairment charges overall are believed to be valued up to R750 million (~A$66.8 million), with the charges expected to impact the group’s earnings per share by at least 20 per cent
The impairment charge has no impact on headline earnings per share.
Within the UK portfolio, Phase Eight's performance has been heavily impacted over several years by the decline in department stores, which accounted for 70 per cent of sales when acquired in 2014, to 45 per cent today, according to TFG.
“The brand continues to focus on growing both its own and selected third party sales channels, while expanding its customer base,” TFG noted.
“However, the repositioning will impact profitability in the medium term and will require a partial impairment of the brand's carrying value in the current period.”
For Australia, in particular, the impairments come as the local market faced a 2.6 per cent drop in recent for the third quarter of FY2026 (ending December 27, 2025). Over the first three quarters, Australia revenue was down 1.9 per cent.
Australia’s YTD revenue contributed 13.5 per cent to total group sales.
TFG said Australian consumers remain value-oriented amidst ongoing tough trading conditions, with the third quarter sales slip of 2.6 per cent following just a 0.5 per cent contraction in the first half of FY2026.
Sales in London and TFG’s largest market of Africa grew over the last quarter and YTD, with London sales in YTD terms up 37.2 per cent.
Despite these sales lifts, the company reported challenges across all three of its core markets. In South Africa, management continues to prioritise inventory clearance within season, cost control and prudent capital allocation to align with shifting consumer behaviour.
“While short-term guidance remains cautious due to low wage growth and subdued discretionary spending, the medium-term outlook is more constructive with lower inflation targeting and lower interest rates, stimulating consumer demand,” TFG reported.
“Higher wage growth is anticipated as real incomes improve under more stable inflation conditions, while a stronger rand and reduced fuel costs are expected to provide cost relief through lower import prices and transport expenses.
“Taken together, these factors point to a gradual recovery in trading performance as local macroeconomic conditions improve.”
Sales in TFG Africa grew by 5.8 per cent for the five weeks ended January 31, 2026.
In the UK, sales volumes are reportedly holding up despite still weak consumer confidence, with profitability dependent on managing gross margin and costs. Sales in TFG London grew by 5.6 per cent (in local currency) for the five weeks to January 31.
As for Australia, sales for the five weeks contracted by 1.1 per cent (in local currency) “as challenging trading conditions remain with persistent cost-of-living pressures”.