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Old Mutual backs Footgear’s plans to buy Edcon’s active stores

Jul 15 2019 10:00
Loni Prinsloo

Old Mutual's private equity arm is backing a plan by Footgear to buy a unit of Edcon in Southern Africa to create one of the region’s largest sports and casual wear businesses.

Footgear plans to combine Edcon’s Edgars Active and High Key assets and rebrand existing stores under the Footgear name, in which Old Mutual holds a majority stake. The deal would be funded from a R3.7bn fund ($265m) previously raised by the Johannesburg-based insurer.

“We have always liked the branded footwear retail space, which is a growing market globally as consumers shift away from formal to more informal and casual wear,” Old Mutual Private Equity’s investment principal Chumani Kula said in an emailed response to questions. “It’s a growing industry that carries certain defensive characteristics, which have enabled the industry to grow top line in South Africa even in a constrained economic climate.”

The deal would give Footgear 180 stores and help Edcon restructure debt after it secured $191m to recapitalize the business in March. Old Mutual’s private equity unit is part of Old Mutual alternative investments that manages $4bn of assets in south, west, and east Africa. The deal is subject to conditions, including regulatory approvals.

edcon  |  old mutual  |  southern africa
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