South African fashion retail company, The Foschini Group (TFG), has bought 100 per cent shares in Australian Retail Apparel Group (RAG) which will become its fully-owned subsidiary by the third quarter of this calendar year. The leading menswear retailer has been sold at an enterprise value of US $ 302.5 million.
It’s worth recalling here that in 2011, private equity group Navis Capital bought 75 per cent of RAG and had been preparing to list it on the Australian Securities Exchange (ASX). The remaining 25 per cent was owned by founder Stephen Leibowitz and company managers.
Gary Novis will continue as CEO of RAG under the new arrangements after acquisition, together with the existing senior management team. “We enjoyed working with the Navis team and have appreciated their support over the last six years. We are excited to be partnering with The Foschini Group, a pre-eminent retailer in South Africa, UK and Australia, and we look forward to further expanding and enhancing our offering with their support,” commented Novis.
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RAG – which runs more than 400 stores – is reported to be on target to post double-digit increase in revenue and profit this year, despite the dejection in the $ 300 billion retail sector that has seen fashion chains collapse since Christmas. Whereas, TFG currently owns 22 retail brands, covering men’s and women’s clothing, homewares, jewellery, sporting and outdoor apparel, and more than 3,000 outlets in Africa and around the world. It has been planning to expand to Australia for several years.
CEO of TFG, Doug Murray said, “We are excited to be able to realise our ambition to expand into Australasia through the very successful RAG business and its well established and experienced management team.”
