The Foschini Group places offer of R480 million for Edcon retail division Jet
TFG CFO Bongiwe Ntuli: There is alignment between TFG's product and value offerings with the Jet brand.
On 10 July 2020, The Foschini Group (TFG) submitted a conditional offer to acquire certain commercially viable stores and selected assets of Jet, a division of Edcon, for a cash purchase consideration of R480 million. The transaction is a unique opportunity in that it also has a huge social impact and will potentially save 5,000 to 6,000 jobs.
Jet has carved out a niche as a fashion retailer focused on selling affordable clothing, shoes, accessories, beauty, home-ware and cellular products. Founded in 1976, Jet competes with Pep, Ackermans and Mr Price. The proposed transaction enables TFG to acquire selected parts of the Jet business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price. The transaction provided the group with structural risk mitigation and established a value retail pillar for the TFG business that would be costly and difficult to replicate organically.
“It will also include the transfer of selected key executives and staff of Jet to ensure sufficient management capacity and continuity to deliver on the current turnaround plan for the retailer,” says TFG CFO Bongiwe Ntuli.
She adds that Jet’s scalable business model with scope for further market share and growth ensures its sustainability as an established South African brand. “There is alignment between TFG’s product and value offerings with the current brand and value offering of Jet.”
The transaction is subject to customary conditions precedent for a transaction of this nature, including among others, the renegotiation of store leases, requisite transitional services arrangements being agreed, TFG board approval and the approval by the relevant regulatory authorities.