Retailability strikes deal with Pepkor to boost market presence in adult wear

In a significant move within the South African retail landscape, Retailability Limited has entered into a transaction agreement with Pepkor.

This partnership is aimed at expanding Pepkor's footprint in the competitive adult wear sector, covering a total of 462 stores across South Africa, Botswana, Lesotho, Namibia, and Eswatini.

“This is a great deal for both parties,” stated Norman Drieselmann, CEO of Retailability.

“While Pepkor gains solid brands to grow their position in adult wear, Retailability is able to increase its investment into Edgars.”

The financial details of the transaction have been pegged at a substantial R1.9 billion, signifying a hefty commitment as both companies look to navigate a changing retail environment.

Importantly, the deal does not encompass the Edgars, Edgars Beauty, Red Square, Kelso, and Keedo brands, which will remain fully integrated within the Retailability portfolio.

Drieselmann emphasised that “the benefits of the sale will become evident as we begin to apply the next phase of our growth strategy into the Edgars brand.” This strategic focus follows Retailability's acquisition of Edgars from the Edcon Group in 2020, during a period when the latter was undergoing business rescue.

Currently, Retailability operates a significant network of 115 Edgars stores and 20 standalone Edgars Beauty outlets, as well as overseeing 15 Keedo and two recently launched Kelso stores within South Africa.

The Kelso brand stands out as a ladies' fashion specialty aimed at meeting the demand for stylish yet affordable female clothing, marking it as a major growth vehicle for Retailability in the next five years.

The final phase of Edgars' fashion turnaround strategy is particularly noteworthy. It involves enhancing the private label value offering while also adjusting the store box footprints. An estimated 48,000 m2 of retail space is expected to be handed back to landlords by 2025, facilitating a more focused and sustainable retail strategy.

“The right sizing strategy will cement the turnaround of this brand and restore its underlying business model,” said Drieselmann.

Moreover, the Edgars beauty segment continues to thrive, maintaining its stature in the prestige and luxury markets. In 2024, six standalone beauty stores have already been launched, underscoring that beauty remains a core element of Edgars' offering.

This strategic partnership comes at a time when the retail sector faces immense pressure from evolving consumer preferences and market dynamics. With both companies poised to leverage their respective strengths, this collaboration could herald a new era in affordable retail fashion across Southern Africa.

IOL