Both YD and Tarocash have recognised on-cash impairment charges in their carrying values for FY26 to March 31, totalling to A$28.5 million, as the Australian market poses challenges.
This is according to an FY26 report by The Foschini Group, the South African company that manages Retail Apparel Group in Australia.
Accounts show that Tarocash has seen an impairment charge of R176 million (A$15.13 million), while YD saw an R156 million charge (A$13.41 million). The Foschini Group pointed out that both brands still remain profitable, but noted current weak trading conditions down under, alongside the transfer of Tarocash’s traditional “big and tall” business to the Group’s Johnny Bigg brand – another brand that operates stores in Australia.
This comes as TFG’s Australia sales fell by 1.5 per cent in FY26 (in AUD), with a decline of 3.4 per cent on a like-for-like basis.
TFG Australia’s total sales hit R8.43 billion (~A$724.8 million).
“Trading conditions in the Australian apparel retail market remained challenging throughout the period due to subdued consumer confidence impacting demand across the sector leading to an increase in promotional activity,” TFG shared in its report.
The company also noted that expenses in the Australian market grew ahead of sales, driven by costs from new stores and continued inflationary pressure on costs.
As a result, TFG Australia earnings before interest and tax (EBIT) fell by 27.2 per cent before the impairments of YD and Tarocash, hitting A$59 million.
At the bottom line, the group’s Australian segment saw a profit before tax drop of 76 per cent, from R779 million in FY25 to R184 million in FY26. Or from around A$66.7 million to A$15.8 million. This was tempered by a 6 per cent reduction to head office roles in FY26.
With interest rates jumping up again this year, adding to consumer confidence and discretionary spending drags, TFG is preparing for another tough year. That comes as Australia sales fell by 2.3 per cent (in AUD) for the nine weeks to May 30, 2026.
Despite the lag, TFG Australia’s gross margin started the year approximately 100 basis points higher, similar to its counterparts in Africa and London.
In FY26, TFG saw 44 new stores opened through the year to April 1, with 53 closed in the year. By year-end, the Australian market had 601 stores.
The performance lag in Australia was not enough to quell TFG’s overall performance. Total sales in FY26 for the group were up 7.2 per cent, driven by the group’s largest market of South Africa, where sales boomed by 5 per cent to R44.13 billion (~A$3.79 billion). Group gross profit also lifted, up 4.5 per cent, despite gross margin dropping by 120 basis points.
At the bottom line, gross operating profit across the group declined 22.1 per cent, excluding brand impairments and acquisition costs.