South African Businesses Struggle: Over 1,500 Closures in 2025

• Over 1,500 South African businesses closed in 2025, with most choosing to shut down voluntarily
• Compulsory liquidations, however, rose by 5.5%, signalling ongoing financial pressure in key sectors like finance, real estate, and trade
• Analysts say the figures reflect a mixed picture for the economy, with cautious optimism for 2026 tempered by high costs, weak demand, and persistent structural challenges

South African businesses are closing at a steady pace, but the reasons behind it tell two very different stories. In 2025, over 1,500 companies shut their doors, most voluntarily, signalling either strategic moves by owners or underlying stress in the economy.

According to Business Tech, while many closures were voluntary, the rise in compulsory liquidations points to deeper challenges, leaving analysts divided over what the numbers reveal about the state of business in South Africa.

What do the statistics say?

Statistics released by Stats SA show that 100 businesses were liquidated in December alone, up 11% from the same month in 2024. However, closures in December were fewer than in November, and the overall number for the last three months of 2025 was lower than the same period in 2024.

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For the full year, 1,534 businesses went under, slightly down from 1,551 in 2024. The majority (87%) chose to close voluntarily. This move doesn’t always signal financial trouble, as some owners wind down operations to redirect resources elsewhere.

Liquidations are a clear sign of struggling businesses

However, experts caution that compulsory liquidations, which make up the remaining 13% of closures, are a clearer sign of struggling businesses. In 2025, 193 companies were forced into liquidation, up 5.5% from 2024. This, according to experts highlight ongoing challenges in the business environment.

Liquidations have been trending downward since 2019, partly suggesting recovery after the COVID-19 pandemic, but also reflecting a smaller overall pool of businesses. Compulsory closures have stayed relatively stable, averaging around 214 a year over the past seven years, with spikes in 2020 and 2023 tied to pandemic lockdowns.

Which sectors were hit hardest?

Businesses in finance, insurance, real estate, and business services were the most affected, followed by trade, catering, and accommodation. Together, these sectors accounted for 503 and 298 closures in 2025, respectively.

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Despite signs of improving sentiment in late 2025, analysts warn it will take time before businesses feel the benefit. High interest rates, weak consumer demand, rising costs, and logistical challenges combined to make 2025 a difficult year for many.

Looking ahead, 2026 brings cautious optimism, with economic growth expected to continue, although high unemployment and low investment could limit recovery.

Hilton closes its doors

In a related article, global hospitality giant Hilton ended its management agreement with the owners of the Hilton Durban, forcing the immediate closure of the five-star hotel. Guests with existing bookings were notified electronically that their reservations would no longer be honoured under the Hilton brand. The sudden shutdown leaves Durban without one of its major business and conference hotels.

Durban Funworld shut down

Durban’s beloved Funworld amusement park, a fixture on the Golden Mile beachfront for over 50 years, closed its doors, marking the end of an era for the city’s iconic attraction. The third‑generation owner said difficulties in securing a long‑term lease and the deteriorating beachfront made continued operation unsustainable. Locals and visitors alike are left reminiscing about fond memories as the site’s future remains uncertain.

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Briefly News also reported that in 2025, several industries in South Africa faced steep job losses due to inflation, falling demand, and the growing impact of AI and automation. The hardest-hit sectors included mining, healthcare, community and social services, domestic work and gardening, construction, and retail and trade. These changes have reshaped the job market, leaving thousands of workers searching for new opportunities.

Proofreading by Kelly Lippke, copy editor at Briefly.co.za.

Source: Briefly News