South Africa’s biggest retailer snaps up five new brands

The Competition Commission has given Pepkor the green light to add five new brands to its stable – Legit, Style, Boardman, Swagga and Beaver Canoe.

These brands are owned by Retailability, and the commission attached certain conditions to this acquisition.

Pepkor, through its subsidiary Pepkor Trading, will buy these brands for around R2 billion as the retailer looks to expand its share in the adultwear market.

Pepkor is currently one of South Africa’s largest retailers and the country’s biggest clothing retailer.

It owns many of South Africa’s most well-known brands, including Ackermans, Tekkie Town, Refinery, Rochester, HiFiCorp, Incredible Connection and Shoe City.

Retailability is an unlisted South African-based group of retail brands, including Edgars, Legit, Beaver Canoe, Swagga, Style, Keedo and Boardmans.

The five brands Pepkor plans to acquire from Retailability operate over 400 stores across South Africa, Botswana, Lesotho, Namibia and Eswatini.

The five brands specialise in the following:

• Legit sells ladies’ fashion/apparel and various beauty products. 
• Swagga consists of Swagga/Beaver Canoe stores that sell apparel for men and boys.
• Style sells men’s and women’s contemporary and formal fashion wear, as well as kids’ clothing and cellular products. 
• Boardmans consists of an online-only store selling appliances and homeware products.

“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” the commission said.

However, to address public interest concerns, the commission stipulated that Pepkor will employ the brands’ employees on terms and conditions that are no less favourable than their current employment terms and conditions. 

In addition, Pepkor will not be allowed to retrench any existing employees because of the merger. 

Lastly, the merged entity has also undertaken to maintain or increase the proportion of local procurement from small to medium enterprises and providers owned by historically disadvantaged persons.

Pepkor has previously said this transaction will add significant additional scale to its Pepkor Speciality business unit and expand its product offering in the adult market, especially in womenswear through the Legit brand.

It added that the acquisition of Swagga and Style has strong synergistic benefits, expanding the group’s store portfolio and providing the opportunity to further grow its share in the adultwear market.

The Boardmans online brand, which operates in the homeware product segment, will become part of the Pepkor Lifestyle business.