South Africa’s TFG will buy the owner of Coricraft, Volpes and Dial-a-bed chains for 2.35 billion rand ($152.78 million) as it looks to expand further into the furniture and bedding market, the retailer said on Monday.
The acquisition will help TFG reduce its reliance on Asia and other import markets, allowing it to source products locally amid spiralling shipping costs and COVID-19 supply chain disruptions.
“The transaction is in line with TFG’s stated strategy of vertical integration in key product categories, and the continued development of its quick response local manufacturing capability,” the clothes, homeware and jewellery retailer said.
Local manufacturing helps improve a retailer’s lead time, increasing its competitiveness against local and global chains.
TFG, also known as Foschini Group, said it is acquiring the shares of Tapestry Home Brands from private equity firm Westbrooke Investments Proprietary Limited, funds managed by Actis, as well as the current and previous management of Tapestry using cash.
Tapestry, a vertically integrated designer, manufacturer and omnichannel cash retailer of home furnishings targeting the middle to upper market operates 175 stores across South Africa, Namibia and Botswana.
Tapestry’s locally manufactured products account for about 47% of its overall net sales, with manufacturing facilities located in Cape Town, Johannesburg and Gqeberha.
The value of Tapestry’s net assets was 115 million rand as of Feb. 28, 2021, while earnings before interest, tax, depreciation and amortization were 264 million rand, with a profit after tax attributable to the net assets of 34 million rand, TFG said.