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SHOPRITE SELLS FURNITURE BUSINESS TO PEPKOR

By Nomfanelo Maziya | 2024-09-12

In a significant business move, South Africa's largest grocery retailer, Shoprite has agreed to sell its furniture business, including the renowned OK Furniture and House & Home brands, to discount retailer Pepkor.

This is inclusive of the four ok furniture retailers in the kingdom namely; Ok Furniture Mbabane, OK Furniture Manzini, OK Furniture Pigg’s Peak and OK Siteki..

According to a report on Reuters, the acquisition, valued at approximately E3.2 billion (US$179 million), will see Pepkor take over Shoprite's furniture operations in several Southern African countries, including South Africa, Botswana, Lesotho, Namibia, Eswatini and Zambia.

The deal does not include the furniture operations in Angola and Mozambique. "The purchase consideration represents about four per cent of Pepkor's market capitalisation and will be settled in cash," said Pepkor in a statement last Monday.

Pepkor, whose market value is currently at E80.49 billion (US$4.50 billion), will also acquire Shoprite's furniture credit loan book, insurance arrangements, inventory, and certain fixed assets. Reuters reported that Shoprite's CEO Pieter Engelbrecht explained that the decision to sell the furniture business was being driven by the company's desire to focus on its core grocery operations.

He reportedly stated that the furniture business required a level of investment that would have diverted resources away from the food retail operations.

Contributed The furniture business contributed approximately E7.2 billion, translating to three per cent to Shoprite's total sales in the last fiscal year. Pepkor, on the other hand, already operates a lifestyle business unit that includes several household furniture, appliances and consumer electronics retail brands.

The acquisition of Shoprite's furniture business is expected to strengthen Pepkor's position in the market and provide it with a broader product range and expanded geographic reach.

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