South African value fashion and homeware retailer Mr Price recently announced acquiring 70 per cent of the ownership of the Studio 88 Group, which includes the SideStep, John Craig, Skipper Bar brands, for 3.3 billion rand (R).
The partnership gives Mr Price “an ideal entry into the high-growth urban wear and athleisure segments”, and presents it with a significant non-competing channel, Mr Price Group chief executive officer (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 said in a press release.
The Studio 88 group operates over 700 retail stores, selling branded leisure, lifestyle and sporting apparel and footwear in South Africa. The Studio 88 merchandise range is a mix of international brands, some under exclusive licence agreements, as well as private label ranges. The 21-year-old group generated R5.6 billion in revenue for the fiscal ended September 30, 2021.
Studio 88 founder Laurence Wernars will continue running the business with his management team.
If the acquisition is successful, pending conditions, it would raise Mr Price’s annual revenue to over R28 billion, and its footprint to more than 2,400 stores. The Mr Price group would also then end up employing over 25,000 people.
The deal is being funded through Mr Price’s existing cash resources. It is acquiring 100 per cent of RMB Ventures’ shareholding in Studio 88 owner Blue Falcon and management will dispose of 50 per cent of their shareholding, allowing Mr Price to pick up the shares. It will eventually acquire the rest of management’s shareholdings over the next four years.