Retailer Mr Price says it has entered into a transaction agreement to acquire 70% of Blue Falcon, which owns the Studio 88 group of businesses, from RMB Ventures and the current management of the Studio 88 Group, for R3.3 billion.
The transaction will be fully funded through the existing cash resources of the group, it said in a statement on Wednesday (13 April).
The Studio 88 Group is an independent retailer of branded leisure, lifestyle and sporting apparel and footwear in South Africa, generating revenue of R5.6 billion for the financial year ended September 2021. It is a founder-led business that has been operating in Southern Africa since 2001.
The business owns and operates retail outlets that offer clothing, footwear and accessories, trading through Studio 88, SideStep, Skipper Bar, John Craig and other chains.
Its merchandise range is a mix of international brands, some of which are under exclusive license agreements, as well as private label ranges. The business operates through in excess of 700 stores, predominantly based in South Africa, which are positioned in central business districts‚ regional malls and rural high streets, and via its e-commerce platforms.
The Studio 88 Group is highly cash-generative and operates on a cash-only basis, which contributes to its value positioning, Mr Price said. “The inclusion of the Studio 88 Group would increase Mr Price’s annual revenue to over R28 billion and would prospectively become the group’s second-largest of nine trading divisions.
“Mr Price’s store footprint would increase to more than 2,400 stores and the group would employ over 25,000 people,” it said.
Mr Price Group CEO, Mark Blair, said: “The partnership with Studio 88 Group gives Mr Price an ideal entry into the high growth urban wear and athleisure segments of the market, which present us with a significant non-competing channel.
“We will continue to be a predominantly private-label group, but our ‘Value Champion’ purpose can also be lived out through the aspirational fashion market, and we are very excited about these prospects.”
The founder of the Studio 88 Group, Laurence Wernars, will continue to run the business, while the seven senior management team members who are shareholders will remain in their current roles and as shareholders.
