Here’s what we know about the ‘completely unknown’ chain worth R1.7 billion to Mr Price
- Power Fashion was founded by the Otto family in Swaziland in the 1950s.
- It is almost "completely unknown" – but still worth R1.7 billion to Mr Price.
- The chain has 170 stores across the Southern African region including Swaziland, South Africa, and Lesotho.
- It offers value fashion at low cost, basic household goods and cellular products.
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No-frills retailer Mr Price announced on Thursday it is in the process of acquiring value retailer Power Fashion, in a deal worth some 4% of its market capitalisation of R42.3 billion, or R1.7 billion.
The retailer will inherit Power Fashion’s customers while entrenching its foothold in the value segment and among lower to middle income consumers in the market.
Mark Blair CEO of Mr Price said the deal offers the retailer significant growth opportunities a territory it is already familiar with.
"It’s completely unknown, one of those names that have gone completely under the radar," he said of Power. "This is a high-performing business even before Covid, its not a Covid casualty and it is not a fixer-upper."
The Power Fashion group was started in the 1950s in Swaziland, where it traded in clothing, footware, and food. Over the past 65 years founders the Otto family have quietly grown it to the point where a map of its stores – now numbering 170 – show significant coverage across Southern Africa.
The group says it employs 1,600 people, and has 70,000m2 in floorspace.
Although first established in what is now Eswatini, the retailer is headquartered in Durban, where Mr Price also has its head office.
Its stores are typically found on community main streets and community malls, as opposed to regional and super regional locations.
While Power Fashion’s merchandise is fashionable, it is not fashion forward, Mr Price said. Most of its products are priced under R100, typically bright-coloured with busy patterns.
Its customer base is made up of consumers on the low to mid income segment of the market. Like rival Pep, it also sells basic household items, value cosmetics, electricity and, tech products, plus cellphones.
Power Fashion CEO Noel Otto said his company and Mr Price have "kindred cultures" and share an entrepreneurial spirit, and that he expects the integration into Mr Price to be a smooth one.
The finalisation of the deal is expected towards mid 2021, subject to competition approval both in South Africa and Eswatini.
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