TFG, owner of multiple retail brands including Jet, @home, Sterns, Markham and Fabiani, has been given the green light to buy Coricraft, Volpes, Dial-a-Bed and its manufacturing divisions, the Competition Tribunal said, but with added conditions to the sale.
The retailer will buy the 175-store group, Tapestry Home Brands, from Westbrooke Investments for R2.3bn.
The tribunal has not yet publicly disclosed what the conditions are, but plans to make an announcement, it said.
Typical conditions include public interest or empowerment transactions benefiting a BEE group or workers, as well as a freeze on any job cuts.
The merger will add to TFG’s strong manufacturing capabilities. It makes 75% of clothing locally and last year bought suit-manufacturer and tailor House of Monatic and Granny Goose’s bedding manufacturer.
Coricraft produces a large amount of furniture and made-to-order couches locally. When announcing the deal in March, TFG said that Tapestry manufactures about 47% of its own products in facilities in Cape Town, Johannesburg and Gqeberha.
TFG plans to expand the Coricraft manufacturing plant, it said previously, noting that department of trade, industry and competition minister Ebrahim Patel is urging industries to invest in increased local manufacture.
The SA textile industry declined in recent years as retailers turned to cheaper Asian imports, but are now preferring to manufacture at home, which allows a faster response to fashion trends. It can be price competitive, as Chinese wages and shipping rates have increased.
Pepkor had also bid for the group, according to Bloomberg. When the deal was announced, TFG CEO Anthony Thunström said their bid did not offer the highest price, but they were chosen.
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