Pepkor of South Africa will purchase adult apparel companies from Retailability

Pepkor (PPHJ.J), a new tab that opens in South Africa, announced on Tuesday that it will expand into the adult clothes market by purchasing the homewares brand Boardmans and the fashion companies Legit, Swagga, and Style from the privately held retail firm Retailability.

In addition to selling gadgets and furniture, Pepkor already owns the PEP and Ackermans clothing brands, giving it a significant market position in South Africa’s kids’ apparel and school uniform marketplaces.

Subject to applicable net working capital adjustments, the entire acquisition consideration due at the closure of the proposed transaction amounts to less than 2% of Pepkor’s market capitalization, the company said in a statement. The payment will be made in cash.

The sale was valued at around 1.94 billion rand, or $107 million, at Monday’s close, with Pepkor’s market capitalization of 97 billion rand ($5 billion), according to LSEG statistics.

462 outlets are run by the companies Pepkor is purchasing across South Africa, Botswana, Lesotho, Namibia, and Eswatini. With 941 outlets in the same countries, Pepkor’s Specialty business segment will include them.

“The proposed transaction will add significant additional scale to Pepkor Specialty and expand its product offering in the adult market, especially in womenswear through the Legit brand,” stated Pepkor.

Over the past year, Pepkor has expanded its adult wear categories by launching its new womenswear brand, Ayana, and just acquiring Choice Clothing.

In 2020, department store chain Edgars was acquired by Retailability, which offers reasonably priced clothing and leisure items under several labels in Southern Africa, from its financially troubled parent Edcon after it filed for bankruptcy protection.

Per Pepkor, Retailability will continue to run the Edgars, Edgars Beauty, Red Square, Kelso, and Keedo businesses.