SA firm expands local retail footprint

Retail stores, Hi- Fi Corp, Supreme Furnishers, Ackermans, Dunns and Shoe City and Pep stores will soon be owned by the same company
Retail stores, Hi- Fi Corp, Supreme Furnishers, Ackermans, Dunns and Shoe City and Pep stores will soon be owned by the same company

Johannesburg Stock Exchange (JSE) listed company Steinhoff International Holdings Limited is expanding its footprint in the local retail market with the acquisition of four retail outlets.

Steinhoff, which already owns Supreme Furnishers, HiFi-Corporation, Incredible Connections and Timber City in Botswana, has applied to the Competition Authority seeking the greenlight to acquire a majority stake in Pepkor Holdings. Pepkor owns Pep Stores, Ackermans, Dunns and Shoe City in Botswana.

According to a statement from the Competition Authority the proposed transaction involves Steinhoff International Holdings Limited acquiring 92.34% shares in Pepkor Holdings. “Steinhoff International Holdings Limited is a public company listed on the Johannesburg Stock Exchange (JSE).

“Steinhoff is an integrated retailer that manufactures, sources and retails furniture and household goods in Europe, Africa and the Pacific Rim.


“In addition, the group holds an associate interest in KAP Industrial Holdings Limited, a separately JSE listed group, which is a diversified industrial business operating in Southern Africa, consisting of timber products and other raw materials, and provides specialist supply chain and logistics services across diverse industries.  “On the other hand, Pepkor is a holding company with subsidiaries that operate in the retail industry, supplying clothing, footwear, and accessories including personal apparel, financial services, homeware, cellular hardware, prepaid airtime, starter packs, and data bundles, and mobile accessories to consumers,” reads the statement.

The competition watchdog has therefore called on any person, including a third party not party to the proposed merger, to voluntarily submit to the Authority any document or other relevant information in respect of a proposed merger.

Steinhoff’s proposed expansion in Botswana adds to the numerous other movements by South African firms into the Sub Saharan region as competition heats up in Africa’s most advanced economy. 

The rapid growth of most economies in Sub Sahara Africa has also attracted Foreign Direct Investment in the retail market as South African companies seek to tap into the growing spending power of the burgeoning Africa’s middle class.

Two years ago diversified South African company PSG Group bought Botswana’s consumer goods distributor, CA sales for P285 million (300 million Rand).

Last year, another JSE listed firm RCL Foods, through one of its operating subsidiaries Vector Logistic, entered into an agreement to acquire a 49% shareholding in Senn Foods Logistics of Botswana, for P65.5m (R79.9m).

Senn Foods Logistics is the largest cold chain distribution business in Botswana and is involved in the distribution of dry, frozen and chilled foodstuffs.

Botswana’s growing consumer spending power, low country risk and an unsaturated market have ranked her as one of the best new destinations for global retailers in Africa, primarily from neighbouring South Africa.

Botswana’s  $16,000 GDP per capita, one of the highest in Africa, has played a crucial part edging up the retail sales per capita. 

Due to market saturation in South Africa, retailers in that country have been aggressively eyeing the sub-Saharan market for expansion leading to the mushrooming of many malls in Gaborone in a short space of time.

In the past year, three malls- Sebele, Rail Park and Airport Junction- have opened shop in Gaborone with most tenants being South African retailers.

Editor's Comment
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