Popular UK fashion chain Phase Eight is preparing to close several underperforming stores as the high street continues to face challenges. The brand, known for premium womenswear, has been a staple for nearly 50 years, starting as a small London boutique and growing to 300 stores and concessions, including 100 standalone shops.
Declining Sales Prompt Cost-Cutting
Owner TFG London has warned it will cut costs across the struggling brand, potentially leading to store closures nationwide. A clearance sale is already underway at its St Andrews branch, which is set to close, according to the Retail Gazette. Once this Scottish branch closes, only five Phase Eight standalone stores will remain in Scotland, located in Edinburgh, Glasgow, Aberdeen, and Gretna.
TFG's Right-Sizing Strategy
TFG plans to accelerate right-sizing of Phase Eight's UK portfolio over the next 12 months. The decision follows years of declining sales, heavily impacted by the downturn of department stores, which account for 70% of sales. The parent company itself faces difficulties, with sales in Australia and London proving more challenging than expected due to macroeconomic conditions.
The group recorded a £30 million impairment against the Phase Eight brand, reflecting lower long-term cash flow expectations. Excluding the impairment and the 2024 purchase of White Stuff, EBIT costs fell from £26 million to £9 million, a 65.4% decline.
Wider Impact on TFG's Portfolio
TFG's UK legacy portfolio, including Hobbs and Whistles, has suffered from weaker occasion-wear sales, softer department store trading, and a cyber incident affecting a key online concession partner. Group sales rose 29.4% to £488 million in the year to March 31, boosted by the White Stuff acquisition. However, excluding White Stuff, sales were flat at £296 million, with gross profit down 6.5% and trading expenses up 5.6%.
Overall, TFG London opened 48 outlets and closed 98 during the year, ending with 649 locations. It recently closed Phase Eight branches in Dundee and Perth.
Broader High Street Struggles
UK high street sales have been declining due to a shift to online shopping, rising national insurance, and employment costs. Other retailers are also affected: Bank of Scotland is closing 12 branches from this month, citing customer preference for mobile banking. Meanwhile, Glasgow-founded Quiz Clothing is closing all 37 stores after entering administration for a second time.
The Daily Record has approached Phase Eight for comment.
