Old Mutual backs Footgear’s plans to buy Edcon unit
Old Mutual Private Equity says that the branded footwear retail space is growing globally ‘as consumers shift away from formal to more informal and casual wear’
Old Mutual’s private equity arm is backing a plan by Footgear to buy a unit of Edcon to create one of Southern Africa’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 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 e-mailed response to questions.
“It’s a growing industry that carries certain defensive characteristics, which have enabled the industry to grow topline in SA even in a constrained economic climate.”
The deal would give Footgear 180 stores and help Edcon restructure debt after it secured $191m to recapitalise 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.