Empire-builder Wiese heads for the High Street UK
NOT content with nailing down the largest takeover in South African corporate history, 71-year-old retail magnate Christo Wiese has now set his sights on expanding his empire in Britain’s retail market.
Wiese has assembled a team of experts to build a new retail brand under Pepkor UK Retail Limited. It will be run by Andy Bond, the former boss of UK supermarket chain Asda, now owned by Walmart.
Mr Wiese said he’d been looking to launch in the UK for some time.
“We’ve got a team together there headed by Andy and we are looking for opportunities in the fashionable value retail combination,” he said. “We think that’s where the growth area is in the UK market.”
Pepkor, which owns Pep and Ackermans, will be sold to Markus Jooste’s Steinhoff for R62.8bn in a deal announced two weeks ago.
Though Pepkor does make a large amount of money in Eastern Europe, this expansion into Western Europe is different. It is also likely to satisfy one of Wiese’s long-held ambitions of expanding into the UK.
Last year, Mr Wiese was rumoured to be part of a takeover bid for BHS, the department store chain controlled by Sir Philip Green, according to The Telegraph.
Mr Wiese dismissed th e rumours. ” Philip and I are friends, and a few years ago I spoke to him briefly about his operation at BHS — but there were no discussions or anything like that in terms of an acquisition,” he said.
Mr Wiese said there was no specific timetable just yet and no launch date.
However, details in the British media this week said the project to launch the new discount fashion chain was codenamed Project 50 — apparently because the plan is to establish 50 stores within two months of the business launching.
Mr Wiese will reportedly put an initial £20m into the project, and it will be the biggest fashion chain launch for more than a decade to hit city centres. Similar to Pep and Ackermans in South Africa, the plan will be to sell “affordable fashion” at prices competing with the supermarkets, catering for mothers and children specifically.
Property agent Savills has been appointed to lead the search for stores from 279m² to 465m², according to the UK’s Financial Mail on Sunday.
The paper said the first lease was expected to be signed within days with others to follow.
The timing is partially driven by the low cost of High Street retail space, which has dropped substantially over the past few years.
Mr Bond, who is chairman of online cycling retailer Wiggle, ran Asda’s George clothing business during its rapid expansion. He is running Project 50 with Adrian Mountford, who used to run Sainsbury’s Tu clothing business. Former head of merchandising at Marks & Spencer Cathy Haydon is on board, as is Mark Jackson, the finance director of Pepkor UK who was previously finance director at Heal’s department store.
The group will have its headquarters in Watford, Hertfordshire.
The Financial Mail said the project represents a major vote of confidence in the beleaguered High Street as the strategy depends on a renewed demand for access to local shops.
“They are targeting secondary High Streets, many of which have been deserted by bigger shops in favour of out-of-town retail parks or shopping centres.”
The article quoted a source as saying: “This is an ambitious project to create a new national chain of shops. The view is that the death of the High Street has been overstated. It’s just changing shape. A typical High Street has B&M Bargains and Tesco Express, but not a credible clothing shop.”
“A lot of secondary High Streets in the UK are under-served by good quality clothing and family fashion. This will appeal to the value seeking mum,” said he source.
The Telegraph said the retailer would be entering a fiercely competitive market. As well as dominant players such as Marks & Spencer and Next, Pepkor would be taking on discount chains such as Primark, Matalan and TK Maxx.