South African retail group, The Foschini Group (TFG), has announced its plans to acquire 371 stores and selected assets of Jet from Edcon’s administrators for 480 million rand ($28.7 million). This move will enable TFG to enter the budget apparel market and expand its presence in South Africa.

Edcon, the parent company of both Jet and Edgars, filed for bankruptcy protection earlier this year due to fierce competition from international fashion chains and the inability to establish a successful e-commerce strategy. In contrast, TFG owns 29 retail brands that operate in various sectors such as fashion, jewelry, accessories, and homeware.

By acquiring the Jet brand and its assets, TFG aims to establish a stronger position in the value retail segment, where it currently lacks representation. The deal includes the acquisition of profitable stores, a distribution center, and certain stores in neighboring countries such as Botswana, Lesotho, Namibia, and Eswatini. TFG will also take charge of the Jet Club membership program and existing stock valued at a minimum of 800 million rand.

Investors have responded positively to TFG’s acquisition, resulting in a 9.09% increase in the company’s shares, closing at 67.83 rand. Gryphon Asset Management portfolio manager Casparus Treurnicht believes that Jet is a perfect fit for TFG due to its strong brand presence in South Africa. Investment analyst Christopher Gilmour also commends the deal, stating that it presents TFG with an opportunity to acquire a reputable brand and valuable stock at an attractive price.

In addition to TFG’s acquisition of Jet, Edcon’s administrators have also announced the sale of parts of Edgars to private equity-backed Retailability Ltd. This strategic move aims to salvage certain sectors of the struggling retail group and ensure their continued existence in the South African market.

Overall, TFG’s acquisition of Jet represents a significant expansion of its retail portfolio and positions the company to capitalize on the growing budget apparel market. With the inclusion of Jet’s established brand and extensive network of stores, TFG has the opportunity to strengthen its position and compete more effectively against international fashion chains.

Useful links:

1. [The Foschini Group Official Website] (https://www.tfglimited.co.za/)
2. [Edcon Official Website] (https://www.edcon.co.za/)