Pepkor is to acquire the Legit, Swagga, Style and Boardmans businesses from privately owned retail group Retailability as part of the group’s strategy to win market share in the adult wear category.
The Pep and Ackermans owner said the transaction would bolster its footprint and presence in the adult wear market in fulfilment of its strategy to grow its market share in the lucrative segment where is has played second fiddle to rivals for years.
“The proposed transaction will add significant additional scale to Pepkor speciality and expand its product offering in the adult market, especially in womenswear through the Legit brand,” Pepkor said.
The acquisition of Swagga and Style had strong synergistic benefits, expanding the group’s store portfolio and providing the opportunity to further grow the group’s share in the adult wear market, Pepkor said.
The transaction comes just five months after the purchase of adult wear group Choice Clothing, a discount retailer with more than 100 stores in SA and Namibia.
The company indicated its intentions to ramp up efforts to capture a larger share of SA’s adult apparel market, which accounts for most of the country’s clothing sector, in its 2024 annual report published earlier this year.
While the group dominates the children’s and babywear categories, it trails behind peers and rivals such as Mr Price, TFG, Truworths and Woolworths, which generally do well in this market.
A study by the Retailers’ Liaison Committee shows Pepkor’s commanding position in children’s clothing.
According to the data, the group leads in babywear, accounting for two-thirds of sales, children’s apparel (half) and school uniforms (three-quarters). However, with the adult apparel segment representing 60% of the total market, Pepkor now has a mandate to build customer loyalty beyond childhood.
The group’s stated ambition is to cement and strengthen its position in the babies’, children’s, school and home categories and to expand share in the adult market.
According to Statista, SA’s apparel market is projected to generate $6bn (R112.5bn) in revenue in 2025, with a compound annual growth rate of 5.39% in 2025 to 2029. Women’s apparel is set to dominate, with a market volume of $2.63bn.
Retailability offers apparel and lifestyle products across a number of retail brands in Southern Africa. The businesses to be acquired operate 462 stores across SA, Botswana, Lesotho, Namibia and Eswatini, Pepkor said in a statement.
The Edgars, Edgars Beauty, Red Square, Kelso and Keedo businesses are not included in the transaction and will continue to be operated by Retailability, it said.
The acquisition is subject to regulatory and commercial suspensive conditions customary for a transaction of this nature.
Edgars, one of SA’s oldest retail chain, faced financial challenges that were worsened by the global financial crisis and the Covid-19 pandemic. In 2020, Edcon, the parent company of Edgars, entered business rescue, leading to a restructuring of its operations.
Pepkor’s move comes amid growing competition from rivals such as TFG, which acquired Jet in 2020 to strengthen its affordable fashion segment. Pepkor had also considered acquiring Edgars outright for R2.4bn but shifted focus to Retailability’s other brands instead.
The acquired businesses would be incorporated into the Pepkor speciality business unit, which provides a range of adult apparel, footwear and accessories across seven retail brands, including Tekkie Town, Shoe City, Dunns, Refinery, CODE, SPCC and Ayana.
Pepkor Speciality’s total store base comprises 941 stores across SA, Botswana, Lesotho, Namibia and Eswatini.
‘Significant scale’
“The proposed transaction will add significant additional scale to Pepkor Speciality, and expand its product offering in the adult market, especially in womenswear through the Legit brand,” Pepkor said.
The acquisition of Swagga and Style had strong synergistic benefits, expanding the group’s store portfolio and providing the opportunity to further grow the group’s share in the adult wear market, Pepkor said.
The Boardmans online brand, which operates in the homeware product segment, will become part of the Pepkor lifestyle business. Pepkor will unlock value through its extensive scale in sourcing, supply chain and back-office functions, in addition to leveraging its capabilities in credit and other financial services.
Tyrone Vieira, CEO of Pepkor emerging businesses, said the Legit and other Retailability businesses were a natural fit for Pepkor Speciality.
Pepkor COO Sean Cardinaal said the acquisition of these businesses “represents a major milestone in the execution of Pepkor’s strategic growth model by accelerating growth in the group’s traditional retail core. This, in turn, will enable strategies in our other growth pillars of financial services and connectivity, omnichannel and leverage & efficiency — contributing to Pepkor’s delivery of compelling and sustainable long-term performance and returns.”
The total purchase consideration, to be settled in cash, was not disclosed, but Pepkor said it represented less than 2% of its market capitalisation of R97bn.
With Lindiwe Tsobo and Nompilo Goba
Update: March 25 2025
This article has been updated with additional information.
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