All conditions met as TFG takes over 382 SA Jet stores
By Karl Gernetzky
Foschini owner TFG says all the conditions for its acquisition of SA Jet stores have been met, with the group having picked up more of the stores than it initially anticipated after striking deals with landlords.
TFG’s deal with struggling group Edcon has led to the transfer of 382 Jet stores and about 4800 employees transferred with effect from 25 September 2020.
TFG is set to pick up a further 43 stores across the rest of Southern Africa and had originally expected to acquire 371 commercially viable stores across five countries, said TFG CEO Anthony Thunström.
“Our strategic focus is on driving sustainable economic growth through successful businesses and investment in retail, local manufacturing, and digital transformation, as well as skills development in Southern Africa. Jet ticks every one of these boxes,” he said.
He added that support from the majority of landlords meant the group is likely to acquire a total of 425 Jet stores. New three-year leases will be signed for all the Jet stores that TFG acquires, Thunström said.
TFG announced in July it had made a R480m bid for commercially viable Jet stores and had reached a sales agreement on August 14 with Edcon’s business rescue practitioners.
The Competition Tribunal announced approval for the deal on Wednesday, with conditions including that Foschini may not retrench employees as a result of the merger for two years. Foschini will also need to give preference to eligible Edcon employees should vacancies arise in the Jet business for a period of three years.
Conditions, such as approval from authorities, are still outstanding for the acquisition of Jet stores in Botswana, Namibia, Lesotho, and Eswatini, TFG said on 25 September 2020. The implementation of these agreements is expected to be finalised in the next few months.
Edcon was placed in business rescue at the end of April after it could not pay suppliers after weak January sales and a loss of trade when stores were closed during the COVID-19 lockdown.
Its business rescue practitioners, Piers Marsden and Lance Schapiro said it is pleasing that the transaction with TFG could be concluded within two months of its announcement. “Our determined efforts were directed to managing the interests of all stakeholders, including landlords and suppliers who will continue to have a measure of stability through this deal.”
Edcon has also reached an agreement with Retailability, the owner of Legit, Beaver Canoe, and Style stores, to sell parts of Edgars. Retailability operates more than 460 stores across Southern Africa.
This transfer was also approved by competition authorities earlier in September, with that transaction implemented on September 15. The sale includes the transfer of approximately 120 Edgars stores in SA.
In afternoon trade, TFG’s share was down 1.27% to R75.33, having lost just more than 42% so far in 2020.
· Source: Business Live