Deacons in talks to offload Mr Price franchise
Clothing retailer Deacons East Africa has entered talks to sell its local franchise of clothes and home accessory outlet Mr Price.
The proposed transaction has already received board approval after being approached by the Mr Price Group Limited.
The deal comes after the South African clothing retailer seeks to gain control of its brand in Kenya, which has been in operation since 2007, after gaining success with local consumers.
Modeled as a low and middle income clothing store, Mr Price has expanded its operations in Kenya opening 11 stores.
The deal is still subject to regulatory approval with no value yet to be attached to the proposed transaction.
Deacons’ chief executive officer Muchiri Wahome said further information relating to the proposed deal will be circulated to the company’s shareholders prior to a shareholders’ meeting to consider the proposed transaction.
“In the meantime, the shareholders of Deacons and other investors are advised to exercise caution when dealing in the shares of the company,” Mr Muchiri said.
The deal, if approved, will see the firm purchase and operate all the 11 Mr. Price Home and Mr. Price apparel stores in Kenya.
Apart from Mr Price, Deacons operates stores such as Truworths, Babyshop, Lifefitness, 4 U 2, Adidas and F & F.
Deacons has been operating in a tough business environment, reporting a Sh180.2 million loss amid slowing sale and higher operating costs.
The clothing and lifestyle goods retailer has also been affected by the slowing foot traffic to major shopping malls as a result of struggling retailers such as Nakumatt and Uchumi.
To boost sales, Deacons has announced plans to open an online portal to tap tech-savvy customers a move aimed at also cutting operating costs.
Deacons will take online orders and deliver goods to customers from the first quarter of 2018.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: | THE EXPLAINER | Laboratory procedures for Covid-19 testing