Connor, Tarocash owner says Country Road isn’t alone on grim retail outlook

Hot on the heels of Country Road Group’s owner warning of recession conditions in Australia, the South African parent of Tarocash and Connor has made a similarly dire diagnosis.

The South African owners of fashion chains Tarocash, Connor and yd. have warned of tough trading conditions in Australia.

Hot on the heels of the South African owner of Country Road Group warning of recessionary conditions in the Australian fashion retail sector, fellow South African retailer and owner of youth apparel chains Tarocash and Connor has made a similarly dire diagnosis of the economy.

The Foschini Group (TFG) highlighted to overseas investors the rising cost of doing business in Australia, led by escalating rents and wages, which are making the already arduous business environment even harder.

One of the nation’s largest fashion houses with 610 stores in Australia and New Zealand across a range of brands, TFG warned of great economic challenges facing the retail industry and its own businesses led by low consumer confidence and persistent cost-of-living pressures.

The owner of fashion chains yd., Johnny Bigg, Rockwear and AXL + Co suffered a retreat in its local sales and earnings over fiscal 2025 as the combined impact of a softer economy, skittish shoppers and discretionary pressures dented its performance.

The latest accounts lodged by TFG reveal sales for its Australian business slipped almost 3 per cent to $745m for the 12 months to the end of March as pre-tax earnings dropped 15.6 per cent to $76m.

Its flagship Tarocash and Connor chains, which have almost 300 stores, suffered the largest falls in turnover for the period.

The South African owners of fashion chain Tarocash have warned of weaker consumer confidence and a rise in discounting in the sector.

“Consumer confidence remains low amid cost-of-living pressures and relatively high interest rates,” it said in its presentation to South African investors and analysts.

“Cost of doing business pressures including award wage increases and rent.

“TFG Australia continued to face difficult trading conditions with consumers under sustained cost-of-living pressure … a mixed performance throughout the second half in a highly promotional market, impacted also by Cyclone Alfred in the fourth quarter.”

It warned the Australian fashion and apparel market remained competitive and was promotionally led as rivals discount to lure shoppers and shift their stock.

The company operates 563 stores in Australia and emerged as a major player after paying just over $302m for Retail Apparel Group in 2017 which gave it the Tarocash, Connor and the yd. brands.

The fashion company saw positive signs, with the Australian economy on track for improvement and recent interest rate cuts expected to foster a more optimistic outlook.

“Although trading conditions remain challenging, the economy appears to be stabilising with two quarter-per cent interest rate reductions in recent months. After a weaker April, sales in May grew by 2.3 per cent,” the company said.

However, its downbeat reading of the sickly Australian retail sector comes as fellow South African retailer, Woolworths Holdings, reported collapsing sales and earnings for Country Road Group and memorably labelled the industry as being mired in recession.

South African owners of brands such as Tarocash, Connor, Country Road and Mimco are struggling in the face of cost-of-living pressures for shoppers.

In March the owner of Country Road Group – whose stable includes Country Road, Mimco, Witchery, Trenery and Politix – said Australia had been in a “retail recession” for 18 months.

The Johannesburg-listed retailer that once owned David Jones blamed these conditions for having pushed more than 700 businesses into bankruptcy in 2024, up 55 per cent.

Country Road Group, which has also been in the grips of a workplace bullying and sexual harassment scandal, posted a 71.7 per cent slump in interim earnings to $14.2m as the downturn and tough trading environment reduced traffic into its stores. A weak dollar and heavy discounting also constricted profits. Country Road Group’s sales fell 6.2 per cent for the period and by 7.8 per cent on a comparable-store basis.

Country Road is closing a number of stores to trim its costs, including two flagship stores in the Sydney CBD, and has more than 50 unfilled roles at its Melbourne headquarters following a recent restructure, redundancies and staff departures.

Originally published as Connor, Tarocash owner says Country Road isn’t alone on grim retail outlook