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Johannesburg - Retailer Shoprite is buying upscale Wetherlys furniture stores from the unit of failed credit lender African Bank, the competition watchdog said on Thursday.
Ellerine is under protection from creditors, similar to Chapter 11 bankruptcy in the United States, after its parent collapsed under a mountain of bad debts in August. It owes creditors around R1.3bn ($110m).
The Competition Commission also recommended that the deal, of which the value was not disclosed, be approved on condition that Shoprite [JSE:SHP] does not lay off the more than 300 workers at Wetherlys.
It's unclear if Shoprite would be taking over the stock in Wetherlys 217 stores or even trade under the brand, although the stores and website are splashed with "Closing Down Sale" banners.
Shoprite was not immediately available to comment.
Ellerine has received a R400m indicative offer for its nearly 80 stores outside South Africa and has the competition watchdog's preliminary approval to sell 63 stores of its Beares brand to Lewis Group for up to R90m ($8m).
The Competition Commission has also given a nod to the acquisition of Dial-a-Bed by Coricraft. Other Ellerine brands include Ellerines stores, Furniture City and Geen & Richards.
