Johannesburg - Truworths International agreed to buy the South African clothes-retail business of Naartjie, the company’s second purchase of a childrenswear specialist in as many months.
The proposed acquisition for an undisclosed cash amount will add a network of 26 stores to Truworths’ more than 600 outlets across South Africa, the Cape Town-based company said in a statement today.
The deal has been approved by courts in the US, where Naartjie’s closely-held owner is in the course of bankruptcy proceedings.
Truworths announced October 7 the purchase of high-end kidswear chain Earthchild Clothing (Pty) Ltd, also for an undisclosed cash sum.
South African retailers have been struggling to boost growth organically this year as high inflation and unemployment of more than 25 percent hurts consumer spending.
Truworths generates most of its sales on credit, which has been in short supply as customers battle to pay back loans.
“Naartjie has excellent growth potential after an initial consolidation phase and will reinforce our growth prospects in the kidswear market,” Truworths chief executive Michael Mark said in the statement.
“Earthchild and Naartjie together with our highly successful LTD Kids range enhance the Truworths children’s emporium brand appeal.”
Truworths shares gained as much as 3.2 percent and traded 2.3 percent higher at 74.85 rand as of 2:47 pm in Johannesburg, valuing the company at 31.6 billion rand. - Bloomberg News