Truworths in talks to buy UK retail group

Cape Town - Truworths [JSE:TRU] advised shareholders on Monday that it has entered into preliminary non-binding negotiations regarding a potential acquisition of Office Retail Group.

Office is a fashion footwear retailer based primarily in the United Kingdom. It offers men's, women's and sports footwear at the mid-level price range. Office's selection of footwear comprises both third party brands and its own brands, and the business currently operates from approximately 150 sites.

"No binding offer has been made and neither has any transaction been concluded with Office or its shareholders,” Truworths said in a statement to shareholders.

"Truworths shareholders are accordingly advised to exercise caution when dealing in the Company's shares until a further announcement is made."

Truworths share price jumped 3.81% at R89.55 in early afternoon trade, outperforming its peers.

Earlier this year Truworths acquired South African children's clothing companies Naartjie and Earthchild.

READ: Truworths' sales growing

At the time the company told Fin24 that, after building up its women's wear and men's wear in-store emporiums with its own brands, Truworths is setting its focus to conquering the children's wear market.

Truworths cautionary follows the announcement of another SA company announcing plans to expand in the UK market. Last week investment company Brait SE [JSE:BAT] announced it will pay $1.2bn for almost all of budget clothes retailer New Look, giving it a strong presence in Britain's competitive fashion retail market.

Other examples of a South African retailers looking abroad - often to protect against the weakening rand - are Woolworths, which bought the Australian chain David Jones for about $2bn in 2014 and Foschini Group negotiating to buy Phase Eight - yet another British clothing chain.

In August this year, about a year since Woolworths [JSE:WHL] acquired Australian luxury department store chain, David Jones, Woolworths launched its private brand, Studio.W, across all 38 David Jones stores in Australia.

Studio.W  joins other Woolworths private brands, RE: and JTOne, on the David Jones rails.

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