Retailer behind Tarocash, Connor brands facing potential $67m hit amid plummeting sales

The owner of Australian menswear brands Tarocash and Connor is the latest retailer to call out softening sales during the crucial Christmas trading period, warning it has now extended into the new year.

It comes as the nation’s retail industry faces a gloomy outlook for the year ahead after the Reserve Bank of Australia hiked official interest rates from 3.6 per cent to 3.85 per cent earlier this week.

South Africa-based Foschini Group told the Johannesburg Stock Exchange that sales at its Australian arm — which also includes plus-size menswear brand Johnny Bigg, youth-focused Yd. and activewear label Rockwear — declined 2.6 per cent in the three months to the end of December.

Foschini operates 610 stores in Australia and New Zealand, including 19 Connor and 10 Tarocash stores in Perth.

The group said the sales drop between September and December had accelerated from a 0.5 per cent fall in sales recorded during the first half of the year.

It warned of a potential impairment charge of up to $750 million rand ($66.8m) as a result of the poor trading conditions. This would be shared across Foschini’s Australian and UK operations, which is also experiencing a pullback in consumer spending.

“Trading conditions in London and Australia have proven to be more challenging than expected with macroeconomic conditions showing little improvement,” the group said.

But Foschini said the Australian arm continued to generate earnings significantly above the $43m recorded when the business was first acquired in 2018, generating $94m in the 2025 financial year.

It mirrors the recent trading update from Country Road Group — the company behind the eponymous fashion label and other well-known clothing and accessories brands — which also revealed softer sales leading up to Christmas.

CRG is also behind brands Mimco, Witchery, Politix and Trenery.

Its parent company Woolworths Holdings, also based in South Africa, said CRG had recorded strong sales during Black Friday and Cyber Monday. But this was short-lived, with December trading performance being “softer than anticipated”.

Woolworths Holdings, which has no association to the Australian supermarket chain, said CRG sales growth averaged one per cent for the last seven weeks to December 28.

Australia’s biggest listed retailers are set to release half-year results in the coming weeks, with investors and analysts looking for signs of spending recovery and outlook for the rest of 2026.