Pepkor's existing footprint of 5975 stores will increase significantly with the acquisition of Retailability's Legit, Swagga, Style and Boardmans businesses.
Image: Leon Lestrade/Independent Newspapers
Retail group Pepkor plans to acquire hundreds of Retailability's Legit, Swagga, Style stores and the Boardsmans business as it gains further traction in its strategy to build market share in the adultwear market.
Pepkor’s management, which did not disclose an explicit value of the transaction on Tuesday except to say that it is not less than R1.9 billion, has previously said they want to expand the group's market share in adultwear through organic and acquisitive growth strategies.
The launch of the new Ayana womenswear brand in 32 stores at the end of February 2025, and the recent acquisition of Choice Clothing, are further examples of the group’s adultwear growth strategy.
“These businesses are a natural fit for Pepkor Speciality and we are looking forward to integrating them and unlocking benefits from the added scale," Tyrone Vieira, CEO of Pepkor Emerging Businesses, said in a statement.
The acquired businesses generated R2.4bn in revenue in the 2024 financial year.
Privately-owned Retailability offers affordable clothing and lifestyle products across a number of retail brands via 462 stores in South Africa, Botswana, Lesotho, Namibia, and Eswatini.
Pepkor already operates some 5 975 stores.
The Edgars, Edgars Beauty, Red Square, Kelso, and Keedo businesses are not included in the deal, and will continue to be operated by Retailability.
Pepkor’s strategy is based on the group’s under-indexed market position in adultwear categories, compared to its dominance in babies’, kids’, and school wear.
The acquired businesses will be incorporated into the Pepkor Speciality business unit. Pepkor Speciality sells adult apparel, footwear, and accessories across seven retail brands, including Tekkie Town, Shoe City, Dunns, Refinery, CODE, SPCC, and Ayana.
Pepkor Speciality operates 941 stores, and the proposed transaction will add significant additional scale and expand its product offering in the adult market, especially in womenswear through the Legit brand.
Pepkor said the acquisition of Swagga and Style has synergistic benefits, expanding the store portfolio and providing the opportunity to further grow market share in the adult wear market.
The Boardmans online brand, which sells homeware products, will become part of the Pepkor Lifestyle business. Pepkor aims to unlock value through its scale in sourcing, supply chain, and back-office functions, in addition to leveraging its capabilities in credit and other financial services.
Pepkor's chief operating officer, Sean Cardinaal, said the acquisition “represents a major milestone in the execution of their strategic growth model, by accelerating growth in the group's Traditional Retail core. This, in turn, will enable strategies in our other growth pillars of Financial Services & Connectivity, Omnichannel, and Leverage & Efficiency.”
Pepkor currently accounts for 2 out of 3 baby wear sales, it does 1 out of every 2 kids' wear sales, it does 1 out of 5 home lifestyle sales, and it sells 7.5 out of 10 prepaid cellular sales in the region, according to figures from the Retailers’ Liaison Committee (RLC) and Statistics South Africa.
Its fintech business has some 3 million retail credit accounts, over 330,000 unsecured loans, and 1.5 million cellular rental accounts.
The youthful women’s wear Legit business operates out of 234 stores. The men's clothing focused Swagga operates out of 106 stores, while discount family retailer Style operates from 122 stores.
Pepkor grew sales by 17.8% in the first three weeks of 2025, following robust sales growth and market share gains in its Traditional Retail segment, and good growth in the Fintech segment. The group lifted normalised headline earnings a share 10.3% to 140.2 cents in the 2024 financial year.
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