Truworths acquires Office footwear chain
South African retailer Truworths International has acquired UK footwear chain Office from Silverfleet Capital in a deal worth around for ZAR5.5bn (US$382m) following talks earlier this year.
Truworths made the deal, which involves taking a majority stake, through its UK subsidiary Shoo 615 Ltd. Office management will retain an 11.1% stake, which Truworths has the option to buy within three to five years.
Office operates 104 stores and 47 concessions in the UK, in addition to five in the Republic of Ireland trading under the Office, Offspring, Poste, and Poste Mistress brands. It also operates six stores in Germany and has an e-commerce business, which accounts for around 20% of sales.
The acquisition will be Truworths' first foray into Europe, allowing it to expand and extend its product offering, and comes just three months after it confirmed it was in talks to buy Office.
"Office is a highly attractive business with strong prospects which, under Truworths' ownership, will be further enhanced," the company said in a statement. "The business is well-positioned in the fashion footwear market with potential to expand into many new stores in the UK and Germany in the short to medium term and into other European countries in the medium to longer term. It's rapidly expanding e-commerce business will be a platform for category and range extension.
"The acquisition enables the Truworths group to expand its operations, extend its product offering, benefit from currency diversification and balance its revenue between cash and credit sales."
Faced with soaring unemployment, power shortages, rising inflation and a weaker rand, South African retailers are increasingly expanding abroad. Last year, Australian department store operator David Jones was acquired by South African retail group Woolworths Holdings in a deal worth AUD2.2bn (US$2.1bn).
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