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Mr. Price, a low-cost fashion and homeware retailer, announced on Wednesday that it will buy 70 percent of Studio 88 Group, which includes the SideStep, John Craig and Skipper Bar brands, for R3.3 billion ($225 million).
Mr. Price described the Studio 88 group as the “biggest independent retailer of branded leisure, lifestyle and sporting apparel and footwear in South Africa,” with more than 700 locations. For the fiscal year ending Sept. 30, 2021, the 21-year-old company achieved R5.6 billion ($381.8) in revenue.
“The partnership with Studio 88 Group gives Mr Price an ideal entry into the high-growth urban wear and athleisure segments of the market, which present us with a significant non-competing channel,” Mr. Price Group CEO Mark Blair said.
“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,” he added.
Studio 88’s goods includes a mix of worldwide brands, some of which are licensed exclusively, as well as own label lines.
Wernars, the South African multimillionaire founder of Studio 88, will continue to run the company with his management team.
The addition of the group would expand Mr. Price’s annual revenue to almost R28 billion ($1.9 billion) and its presence to over 2,400 outlets if the transaction is successful, given conditions. In addition, the Mr. Price organization would end up employing approximately 25,000 individuals.
Mr. Price’s existing cash resources are being used to fund the transaction.
It is acquiring 100 percent of RMB Ventures’ interest in Studio 88 owner Blue Falcon, and management will sell 50 percent of its shares, allowing Mr. Price to purchase the shares.
Over the next four years, it will acquire the remaining shareholdings of management.
Mr. Price purchased high-end kitchenware shop YuppieChef this year, and it will acquire value retailer Power Fashion in 2020. Mr. Price’s acquisitions are all part of his plan to become “Africa’s most valuable retailer.”
