Earlier this month, the Competition Commission of South Africa gave Pepkor the green light to add five new brands to its stable – Legit, Style, Boardman, Swagga and Beaver Canoe.
The Competition Tribunal has approved Pepkor’s acquisition of several clothing brands and businesses from Retailability, which will add hundreds of stores to the group’s network.
The Tribunal conditionally approved the proposed deal, in which Pepkor will acquire the retail brands Legit, Style, Swagga (including the Beaver Canoe brand) and Boardmans.
Once the merger is implemented, Pepkor Trading will assume control of all the businesses.
The businesses to be acquired operate 462 stores across South Africa, Botswana, Lesotho, Namibia and Eswatini.
However, the Edgars, Edgars Beauty, Red Square, Kelso and Keedo businesses are not included in the transaction and will continue to be operated by Retailability.
The target businesses in South Africa include:
- Legit, which sells ladies’ fashion/apparel and various beauty products;
- Swagga, which sells apparel for men and boys;
- Style, which sells men’s and women’s contemporary and formal fashion wear, as well as kids’ clothing and cellular products;
- Boardmans, which sells small appliances, bedding, towels, crockery, cutlery, outdoor cooking, bathroom accessories, dining and serve ware and other homeware products.
The Tribunal’s approval is subject to conditions relating to employment, procurement and supplier arrangements, it said.
Under the Competition Commission approval, Pepkor addressed public interest concerns, by committing to employ the employees on terms and conditions that are no less favourable than the current employment terms and conditions.
In addition, the retail brands won’t retrench any employees because of the merger.
Lastly, Pepkor has also undertaken to maintain or increase the proportion of local procurement from small to medium enterprises (SMEs) and providers that are owned by historically disadvantaged persons (HDPs).
The acquisitions align with Pepkor’s broader strategy to scale up its operations in South Africa.
The group is already the largest clothing retailer in the country. It operates over 5,800 stores across 10 African countries.
The acquired businesses will be incorporated into the Pepkor Speciality business unit, which already houses Tekkie Town, Shoe City, Dunns, Refinery, CODE, SPCC and Ayana.
Pepkor’s Speciality total store base has 941 stores across South Africa, Botswana, Lesotho, Namibia and Eswatini.
Earlier this year, the group said the transaction will add scale to Pepkor Speciality and expand its product offering in the adult market, especially in womenswear through the Legit brand.
“The acquisition of Swagga and Style has strong synergistic benefits, expanding the group’s store portfolio and providing the opportunity to further grow the group’s share in the adult wear market. The Boardmans online brand, which operates in the homeware product segment, will become part of the Pepkor Lifestyle business,”
said the group.
It was previously noted that the total purchase consideration payable on the closing of the sale will represent less than 2% of Pepkor’s R96 billion market cap.
The purchase consideration will be settled in cash, it said.
Source: Business Tech
