Discount retailer Pepkor has breached the largest economy in South America, announcing on Thursday that it acquired a controlling stake in the Brazilian-based clothing retailer Grupo Avenida.
Avenida has two major value apparel brands, Lojas Avenida and Giovanna, and 130 stores, mostly in the midwest and Northern regions of Brazil.
Avenida sells itself as a “one-stop shop” for home, apparel, footwear and cellular products to the average Brazilian family. It had a preliminary turnover of about R2.2 billion for the financial year ended 31 December 2021.
Through a subsidiary, the Pep and Ackermans owner acquired an 87% shareholding in Avenida from Kinea Private Equity and the Caseli family, who founded the company 42-years-ago. The family will keep the remaining stake in the company, and Caseli brothers Christian and Rodrigo will remain as director and CEO.
The deal, which followed a two-year due diligence process, is expected to be concluded on Friday.
“Off our strong base in Africa, we are excited about this next chapter for Pepkor to enter a new geography with enormous growth potential. Pepkor has proven to be successful in the international expansion of its business model in the past and we look forward to entering the Brazilian retail market in partnership with the Avenida management team,†Pepco CEO Leon Lourens said.
“I believe that together we will be able to build and grow Avenida to become a significant player in Brazilian value retail.â€Â
Rodrigo, as Avenida’s CEO, said that as founders they are proud to join Pepkor and “look forward to expanding and growing the Avenida business in Brazilâ€.
Pepkor’s performance for the year ended 30 September 2021 surpassed its pre-Covid-19 levels, with its earnings more than doubling to R5 billion for the year (compared to 2020), while its revenue increased by 9.2% to R77 billion. Its operating profit rose by 40% to R9 billion.-fin24
