Mr Price to expand as it buys R3.3bn controlling stake in Studio 88
Retail giant Mr Price announced that has signed an R3.3bn deal to acquire a controlling stake in the Studio 88 Group, which operates fashion retail brands including Studio 88, SideStep, Skipper Bar and John Craig.
Mr Price said in a statement that it will pay R3.3 billion in cash for a 70% stake in Studio 88’s owner Blue Falcon Trading 188.
Studio 88 is a South African clothing and footwear retailer that stocks international brands like Levi's, Adidas and Vans.
Mr Price Group, which acquired both Power Fashion and Yuppiechef during the last two years, said that Studio 88 deal is in line with its plans to continue pursuing high growth opportunities with the vision of becoming the "most valuable retailer in Africa".
The transaction will be fully funded through the existing cash resources of the group.
A Sens statement by Mr Price noted that the Studio 88 Group is focused on consumers who make aspirational fashion choices, and the merchandise range is a mix of international brands – some of which are under exclusive license agreements – as well as private label ranges.
"The Studio 88 Group is highly cash generative and operates on a cash-only basis, which contributes to its value positioning. The management team of the Studio 88 Group has an impressive track record of maintaining strong brand relationships and customer loyalty, delivering consistent earnings growth over the long term," Mr Price said.
According to Mr Price, the brands offered by the Studio 88 Group are complementary to Mr Price’s existing customer positioning and, combined, would deliver on the group’s strategic positioning across the fashion-value and aspirational value segments.
"With a diverse store footprint and a portfolio of differentiated store chain formats, the Studio 88 Group has broad appeal to aspirational and trend-conscious customers across a wide range of age profiles and affordability levels. Mr Price will benefit from growth opportunities in the menswear segment where it is currently under-represented," Mr Price said.
Mr Price group CEO, Mark Blair, said, “The partnership with Studio 88 Group gives Mr Price an ideal entry into the high-growth urbanwear and athleisure segments of the market, which present us with a significant non-competing channel. We will continue to be a predominantly private-label group, but our ‘Value Champion’ purpose can also be lived out through the aspirational fashion market, and we are very excited about these prospects.”
Blair continued, “What attracts us to the Studio 88 Group is their deep understanding of trend-conscious South African consumers and their ability to address their needs via their various trading formats. We also share a similar DNA, both being founder-led businesses intent on offering customers superior value and have high-performance cultures.”
The transaction is subject to the fulfilment of both regulatory and commercial suspensive conditions, as is usual for such transactions, by no later than 31 October 2022. These conditions include competition authority approval in South Africa and other African territories.
Written by: Staff Writer.
Guzzle Media
