The Foschini Group (TFG) has announced a major acquisition of R2.35 billion, which, if approved by competition authorities, will see it own well-known furniture retail and bedding chains Coricraft, Volpes, Dial-a-bed and The Bed Store.
TFG beat fellow JSE-listed retail giant Pepkor to the deal to acquire the entire issued share capital of Cape Town-based Tapestry Home Brands from Westbrooke Investments.
This follows Pepkor reportedly looking at a buyout of the Coricraft and Volpes owner last year.
TFG’s surprise deal for full control of Tapestry Home Brands will see the group increasing its share of the Southern African furniture, bedding and home décor retail market. The group already owns the upmarket @home retail chain as well as the Granny Goose bedding brand.
“TFG is acquiring the sale shares from Westbrooke Investments Proprietary Limited, funds managed by Actis, as well as the current and previous management of Tapestry,” the group said in a Sens statement.
“The Tapestry brands include popular made-to-order furniture retailer, Coricraft; South Africa’s renowned branded bedding retailer Dial-a-bed; home textile retailer, Volpes; and value bedding retailer, The Bed Store.”
“The Tapestry brands are well positioned for growth in the medium to long term. Tapestry’s own, locally-manufactured product accounts for [circa] 47% of net sales, employing a total of approximately 2 500 people, with manufacturing facilities located in Cape Town, Johannesburg and Gqeberha,” added TFG.
Tapestry operates around 175 stores across South Africa, Namibia and Botswana.
Expanded product range and customer base
“The transaction will provide TFG with exposure to new products and categories as well as new customers that will complement the current TFG customer base in existing categories,” the group said.
“The transaction is in line with TFG’s stated strategy of vertical integration in key product categories, and the continued development of its quick response local manufacturing capability.”
The group added that “opportunities exist to further leverage the strength of the manufacturing and sourcing capabilities of both businesses and to continue developing local procurement in a segment dominated by imported goods”.
TFG currently has more than 27 500 employees in South Africa and the deal will see its overall staff numbers top the 30 000 mark. It will also see a further 3 manufacturing facilities added to the group’s growing local production footprint.
“Following the acquisition, TFG Home Division will have nine home consumer brands [@home, @homelivingspace, JetHome, Coricraft, Volpes, Dial-a-Bed, The Bed Store, Granny Goose, and Biggie Best], and four vertically integrated factories [mattresses, upholstered furniture, household textiles, duvets and pillows],” the group noted in a media statement.
“TFG will also have an expanded distribution network and its own last-mile furniture delivery and assembly service,” it added.-moneyweb
