{"id":846433,"date":"2025-12-22T07:15:49","date_gmt":"2025-12-22T05:15:49","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=846433"},"modified":"2025-12-22T07:15:55","modified_gmt":"2025-12-22T05:15:55","slug":"big-shift-for-major-60-year-old-retail-giant-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business-opinion\/846433\/big-shift-for-major-60-year-old-retail-giant-in-south-africa\/","title":{"rendered":"Big shift for major 60-year-old retail giant in South Africa"},"content":{"rendered":"\n

Pepkor, South Africa\u2019s largest clothing retailer, is showing promising signs, with the group set to launch a new bank. <\/p>\n\n\n\n

Speaking with Business Day TV<\/a>, Victor Seanie from Benguela Global Fund Managers chose Pepkor as his stock pick following the group’s strong set of results. <\/p>\n\n\n\n

In the 2025 financial year, the group achieved record profit growth of 170%, increasing from R2.1 billion to R5.6 billion, driven by lower capital items and higher gross profit. <\/p>\n\n\n\n

The group\u2019s total basic earnings per share rose 153 cents, marking an increase of 171.3%.\u00a0<\/p>\n\n\n\n

Its headline earnings per share increased by only 14.8% to 161 cents, as it did not account for non-recurring and extraordinary items in the prior year. The group\u2019s dividend rose by 9.2% to 53.0 cents per share.  <\/p>\n\n\n\n

Seanie said that Pepkor has a significant scale advantage, with 6,000 stores. The retailer, which is dominant in the value segment, is by far the most essential player in the children\u2019s clothing market. <\/p>\n\n\n\n

Seanie said that there is still an opportunity for the company to expand further into the adult wear segment, and it has recently opened a female-focused store in Ayana. <\/p>\n\n\n\n

Pepkor was founded in 1965 in Upington by Renier van Rooyen. At the time, Van Rooyen had just about R1,000 to invest in the business. Today, the group is South Africa’s largest clothing retailer worth billions.<\/p>\n\n\n\n

While being the largest clothing retailer, Seanie said that the most exciting part of the group is its fintech business. <\/p>\n\n\n\n

The fintech grew by 31.1% to R16.6 billion, driven by 61.4% growth in financial services and a 13.7% rise in Flash, its informal market platform.<\/p>\n\n\n\n

Seanie said that fintech revenue comes at far higher margins than their existing clothing business. <\/p>\n\n\n\n

The company also operates a business in Brazil, which exhibits strong growth potential. <\/p>\n\n\n\n

Given its strong management team and fair valuation multiples (P\/E ratio of around 17), Seanie said that Benguela is optimistic about the company. <\/p>\n\n\n\n

New bank around the corner <\/h2>\n\n\n
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In addition to what Seanie raised, Pepkor is also set to launch a new bank in South Africa, following the receipt of regulatory approvals. This will allow the company to expand beyond retail and financial services. <\/p>\n\n\n\n

Pepkor stated that it secured approval from the Prudential Authority in November, enabling it to enter South Africa\u2019s competitive banking sector.<\/p>\n\n\n\n

The move was supported by its acquisition of fintech software provider Cloudbadger. <\/p>\n\n\n\n

Group CEO Pieter Erasmus stated that the acquisition of Cloudbadger was crucial to the bank’s development. <\/p>\n\n\n\n

The bank is expected to announce its offerings and target customers in March 2026.  Pepkor is not the first retailer to offer banking services. <\/p>\n\n\n\n

South African retailers, including Shoprite, also expanded into banking services. Pick n Pay and The Foschini Group also have a strong partnership with TymeBank. <\/p>\n\n\n\n

Despite the dominance of South Africa\u2019s largest banks, including Capitec and traditional Big Four, several companies have expanded into the local banking sector. <\/p>\n\n\n\n

This includes Old Mutual\u2019s OM Bank, Discovery Bank and the recently acquired Bank Zero. <\/p>\n\n\n\n

FirstRand has also acquired a significant stake in UAE-based Optasia, as it seeks to expand its services to the unbanked or underbanked market. <\/p>\n\n\n\n

While Pepkor\u2019s exact plans for its bank have yet to be announced, earlier speculation that Investec was on board has been shut down. <\/p>\n\n\n\n

Investec CEO Fani Titi said that there was no agreement with Pepkor to launch the banking service.<\/p>\n\n\n

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Pepkor Share Price<\/figcaption><\/figure><\/div>\n\n\n
\n","protected":false},"excerpt":{"rendered":"

Victor Seanie from Benguela Global Fund Managers is bullish on Pepkor amid the strong performance of the retailer’s fintech business. <\/p>\n","protected":false},"author":95,"featured_media":834608,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[12777,4076],"class_list":["post-846433","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-opinion","tag-benguela-global-fund-managers","tag-pepkor"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/846433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=846433"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/846433\/revisions"}],"predecessor-version":[{"id":846709,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/846433\/revisions\/846709"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/834608"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=846433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=846433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=846433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}