Foschini buys owner of Australia's Tarocash and Rockwear
Australia's Retail Apparel Group (RAG) is being taken over by TFG (or The Foschini Group) for a maximum price of A$302.5m, the South African giant said Thursday.
TFG, which also owns the Whistles and Phase Eight fashion businesses among a raft of other chains, said current management would stay in place at RAG, which means CEO Gary Novis will continue to oversee the business’s expansion. The 30-year-old value-to-mid-priced menswear specialist has 400 stores and has been growing steadily in recent years.
TFG is paying cash for its latest buy and while the purchase price is not completely clear at present, that is because the takeover deal is priced at seven time RAG’s earnings for the year to the end of June, or that A$302.5m figure, whichever of the two is lowest.
For that outlay, the company will acquire a raft of retail brands including Tarocash, yd, Connor and Rockwear. It is buying the business from Navis capital, which acquired a controlling stake in 2011. Navis partners Philip Latham and Ravi Jeyaraj said they have achieved their original aim of consistent growth over the succeeding years as the company opened new stores and launched new brands.
Despite the Australian fashion retail sector facing the same headwinds as many other countries globally, as well as some that are unique to the market, RAG is performing well and is expected to post double-digit rises in both sales and profits for the current fiscal year.
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