South Africa's Pepkor has revealed it will buy fashion businesses Legit, Swagga and Style and homewares brand Boardmans from privately owned retail group Retailability, as part of its expansion into the adult clothing market.
Source: Reuters/Sumaya Hisham
Pepkor, which also sells electronics and furniture, already owns the PEP and Ackermans clothing brands which have given it a dominant share of the children's clothing and school uniform markets in South Africa.
The total purchase consideration payable on the closing of the proposed deal represents less than 2% of Pepkor's market capitalisation subject to relevant net working capital adjustments, Pepkor said in a statement. It will be settled in cash
According to LSEG data, Pepkor's market capitalisation was R97bn at Monday's close, making the deal worth around R1.94bn.
The businesses to be bought by Pepkor operate 462 stores across South Africa, Botswana, Lesotho, Namibia and Eswatini. They will be incorporated into Pepkor's Speciality business unit, which has 941 stores across the same countries.
"The proposed transaction will add significant additional scale to Pepkor Speciality and expand its product offering in the adult market, especially in womenswear through the Legit brand," Pepkor said.
Pepkor has been growing its adultwear categories over the past year through the recent acquisition of Choice Clothing and the launch of its new Ayana womenswear brand.
Retailability, which sells affordable apparel and lifestyle products across a number of brands in Southern Africa, bought department store chain Edgars from struggling parent Edcon in 2020 after it entered into a form of bankruptcy protection.
The Edgars, Edgars Beauty, Red Square, Kelso and Keedo businesses will continue to be operated by Retailability, Pepkor said.
