TFG beats Pepkor to secure Coricraft and Volpes owner for R2.35bn

The Foschini Group (TFG) on Monday announced a major acquisition of R2.35 billion, which if approved by competition authorities, will see it own well-known furniture retail and bedding chains including  Coricraft, Volpes, Dial-a-bed and The Bed Store.

TFG beat fellow JSE-listed retail giant Pepkor to the deal to acquire the entire issued share capital of Cape Town-based Tapestry Home Brands from Westbrooke Investments.

This follows Pepkor reportedly looking at a buy-out of the Coricraft and Volpes owner last year, with Bloomberg citing analysts in a story published in November.

Read: Pepkor makes offer for SA furniture owner

TFG’s surprise deal for full control of Tapestry Home Brands will see the group increasing its share of the Southern African furniture, bedding and home décor retail market. The group already owns the upmarket @home retail chain as well as the Granny Goose bedding brand.

“TFG is acquiring the Sale Shares from Westbrooke Investments Proprietary Limited, funds managed by Actis, as well as the current and previous management of Tapestry,” the group said in a Sens statement.

“Established in 2005, Tapestry is a prominent direct-to-consumer, vertically integrated designer, manufacturer and omnichannel cash retailer of home furnishings serving consumers’ living and sleeping needs, targeting the middle-to-upper LSM markets,” it noted.

“The Tapestry brands include popular made-to-order furniture retailer, Coricraft; South Africa’s renowned branded bedding retailer Dial-a-bed; home textile retailer, Volpes; and value bedding retailer, The Bed Store.”

“The Tapestry brands are well positioned for growth in the medium to long term. Tapestry’s own, locally manufactured product accounts for [circa] 47% of net sales, employing a total of approximately 2 500 people, with manufacturing facilities located in Cape Town, Johannesburg and Gqeberha,” added TFG.

Tapestry operates around 175 stores across South Africa, Namibia and Botswana.

“The transaction will provide TFG with exposure to new products and categories as well as new customers that will complement the current TFG customer base in existing categories,” the group said.

“Furthermore, Tapestry’s unique business model, with easily scalable local manufacturing and distribution capabilities, is an excellent strategic fit for TFG.”

“The transaction is in line with TFG’s stated strategy of vertical integration in key product categories, and the continued development of its quick response local manufacturing capability.”

The group added that “opportunities exist to further leverage the strength of the manufacturing and sourcing capabilities of both businesses and to continue developing local procurement in a segment dominated by imported goods”.