Cape Town - Pepkor, the retail conglomerate, bolstered its offshore presence yesterday when its British subsidiary, Brown & Jackson (B&J), acquired North Shoe, which trades as The Famous Brunswick Warehouse, for P22,9 million (R235 million).

Market watchers said the North Shoe deal represented a significant return to the acquisition trail for B&J, which last year was outgunned in the bidding for Allied Carpets, a specialist retailer.

Cornus Moore, the financial director of Pepkor, estimated that an enlarged B&J could account for about half of Pepkor`s interim earnings, depending on the usual seasonal adjustments in British businesses.

"The North Shoe business is a relatively small deal, but the guys at B&J think there`s potential to grow this business very rapidly."

Moore said Pepkor`s offshore ambitions would not end with North Shoe, intimating that B&J was regularly being confronted with opportunities in the British retail market.

Pepkor will settle P21,9 million of the North Shoe transaction in cash and the balance in B&J shares.

Johan Visser, the managing director of B&J, said the North Shoe takeover had increased B&J`s total number of stores in Britain to more than 600.

He said North Shoe was a sports fashion and footwear discounter that focused on essentially the same market as B&J`s three existing retail chains - Poundstretcher, Your More Store and What Everyone Wants.

North Shoe, which was started in 1993, operates a total of 32 stores in the north of England and central Scotland.

Visser said the latest acquisition would extend B&J`s product range into branded goods and footwear for its existing target market. He stressed North Shoe would continue to operate as an autonomous business.

"We intend expanding North Shoe into a nation-wide chain. Its founder, Anthony Solomon, will continue as chief executive, and we expect the company to start contributing meaningfully to our profits as from the 2001 financial year."

Visser said North Shoe had grown strongly in its chosen niche market since its establishment, but particularly so in the past year.

In the year to October 1999 it reported a pre-tax profit of P1,9 million, up P1,4 million, on a turnover that grew from P7,4 million in 1998 to P16,2 million.

Pepkor closed 10c up at R25,80 on the JSE yesterday. Shares of B&J rose 2,7 percent to close at 208p in London yesterday.