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Dis-Chem is eyeing another baby goods retailer as it bolsters baby offering

Business Insider SA
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Dis-Chem is looking to acquire Baby Boom.
  • Dis-Chem is looking at purchasing another local baby goods retailer, Baby Boom.
  • Baby Boom, which was founded in the early 1900s, has 28 stores across South Africa.
  • The group is eyeing a share of the resilient baby market.
  • For more stories, go to www.BusinessInsider.co.za.  

Pharmacy and beauty retailer Dis-Chem which recently bought Baby City, is eyeing another baby goods retailer, Baby Boom.

Speaking to Business Insider South Africa, Rui Morais, Dis-Chem's chief financial officer, said it was still early to provide more detail concerning the acquisition.

"We are looking at Baby Boom… We're obviously looking at the baby space closely; we've tried to entrench ourselves in the baby space. The baby space is attractive in terms of the resilience of that spend and the number of new entrants that you see into the baby space," said Morais after the company delivered its interim financial results to the end of August.

"It's very similar to the chronic market. There's a number of babies born every year, so relatively resilient. We look at that space both acquisitively and organically, from a growth perspective," he said.

Baby Boom, which sells branded products and caters to expectant mothers, newborns, and children up to the age of three, has 28 stores across the country and was established in the early 1990s.

Last year, Dis-Chem made significant inroads in the baby market when it acquired one of South Africa's leading baby goods retailers, Baby City, for R430 million. Since acquiring Baby City, the retailer has expanded its offering with the addition of clinics that offer specialised care for babies and mums. Its first baby clinic was launched earlier this year in Johannesburg's BluBird Shopping Centre.

Baby City, which has a network of 35 stores, has already contributed R376 million to the group's retail revenue.

"When we look at baby, we do think there's a service element to baby, and rolling out moms and baby clinics, ultimately that would be a foot driver. There's lots of consolidation that we think will happen in the baby service space where people are currently seeing private clinic sisters, and they can get a full baby experience in the Baby City stores," Morais said.

The group is in the process of revamping the Baby City stores and is working on introducing private label brands inside Baby City.

"Traditionally, they [Baby City] hadn't had any private label brands, and we have some strong private label brands like baby things that run in our own environment that contribute to baby turnover that comes out of Dis-Chem stores. The ability to do that and roll it out to Baby City stores along with that service offering is probably the initial focus area," he said.

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