Major retailer buying up hundreds of stores in South Africa

Pepkor plans to buy several retail brands from Retailability, including Legit, Swagga, Style and Boardmans.

The group said it has entered into a transaction agreement with Retailability Limited to acquire the stores.

Retailability is a privately owned retail group that offers affordable apparel and lifestyle products across several retail brands in South Africa.

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 Proposed Transactions and will continue to be operated by Retailability.

The group also plans to expand its market share in adultwear via its organic and acquisitive growth strategies. It believes it is underrepresented in the category, unlike babies’, kids’ and school wear.

The group said that the launch of the new Ayana womenswear brand in 32 stores in February 2025 and the recent acquisition of Choce clothing are examples of its adult wear growth strategy.

The acquired businesses will also 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.

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 added that it will unlock value via its extensive scale in sourcing, supply chain and back office functions, leveraging its capabilities in credit and other financial services.

“We are excited to welcome the Legit and other Retailability businesses into Pepkor Speciality, forming an integral part of our strategy to grow our market position in adult wear.”

“These businesses are a natural fit for Pepkor Speciality and we are looking forward to integrating them and unlocking benefits from the added scale,” said Tyrone Vieira, CEO of Pepkor Emerging Businesses.

Pepkor’s COO, Sean Cardinal, added that the acquisition of the businesses represents a major milestone in the execution of its strategic growth model by accelerating growth in its Traditional Retail core.

“This, in turn, will enable strategies in our other growth pillars of Financial Services & Connectivity, Omnichannel, and Leverage & Efficiency,” added Cardinal.

The total purchase consideration payable on the closing of the proposed transaction, subject to relevant net working capital adjustments, represents less than 2% of Pepkor’s R96 billion market cap.

The purchase consideration will be settled in cash. The transaction is still subject to standard regulatory and commercial suspensive conditions.