Choppies completes acquisition of 21 stores in SA
Choppies Group has been cleared to acquire 21 retail stores owned by Jwayelani Retail (Pty) Limited effective from 1st March, 2016. This follows the approval of the Competition Commission on 29th January, and an announcement the Group made on 4th February regarding the acquisition.
In a statement published by the Botswana Stock Exchange, the Johannesburg Stock Exchange-listed Group says Jwayelani is a respected brand in KwaZulu-Natal and Eastern Cape provinces and has been in operation for over 25 years. “The acquisition broadens Choppies’ South African footprint to 61 stores, and 170 stores across all markets, and will support further expansion across South Africa given the scale benefits and additional logistical support infrastructure. The acquired stores will be rebranded as Choppies-Jwayelani,” the Group said.
Group Chief Executive Officer, Ramachandran Ottapathu is quoted saying “The acquisition offers a unique advantage to Choppies in its plans to expand across South Africa. Jwayelani is known for its strong brand presence, proximity to the customer, and unparalleled knowledge of their market, which makes for a natural fit within Choppies.”
The Jwayelani acquisition consists of 21 stores with a total of 19, 600 square meters of retail space in urban and semi-urban locations, with an additional three locations identified for expansion. The retail space is supported by one distribution centre with capacity to support an additional 50 stores.
“The butchery component makes up 40% to 50% of contribution to revenue in any given store and offers a high-value product line. Choppies is looking forward to integrating Jwayelani’s butchery value chain into its South African operations,” said Ottapathu.
Jwayelani generated revenues of over R1 billion in the year ended in December 2015 with a gross profit margin of 20.37% and profit before tax margin of 2.84% for the period. Jwayelani gross profit grew by 8.93% in the same period.