JSE-listed Pepkor group, which includes well-known brands such as PEP, Ackermans, Incredible Connection, BUCO and Tekkie Town is pleased to announce its acquisition of Brazilian-based value retailer, Avenida, effective date 4 February 2022. Representing less than 4% of Pepkor’s market capitalisation, the transaction enables Southern Africa’s largest retailer by store footprint to partner with Avenida’s founder-led management team in Brazil to unlock significant growth in the largest economy in Latin America.
After more than two years of extensive research into emerging market opportunities and a thorough due diligence by management and various advisors, Avenida has been identified as a strong strategic fit. Pepkor has a proven ability to successfully replicate its discount and value business model within emerging markets, having previously owned Pepco in Central and Eastern European – this business grew from 13 stores to more than 3500 today.
Pepkor’s CEO, Leon Lourens said: “We are excited about this new chapter for Pepkor to enter a new geography with enormous growth potential. Pepkor has proven to be successful in the international expansion of its business model in the past and we look forward to entering the Brazilian retail market in partnership with the Avenida management team. The combination of Avenida and Pepkor brings together the required capital, retail synergies and the collective know-how to bolster Avenida’s growth in years to come. I believe that together we will be able to build and grow Avenida to become a giant in Brazilian value retail.”
Operating in the low end of the Brazilian retail market with a diversified product mix across its 130 stores, Avenida has a market-leading presence in core regions of Brazil. A lower to middle income population of approximately 212 million people provides enormous potential to exponentially increase its store base and revenue.
Preliminary financial results for the 2021 financial year indicate that Avenida was able to comfortably surpass 2019 sales levels with a turnover of BRL 773m.
Avenida’s CEO, Rodrigo Caseli said: “As founders of the Avenida business we are proud to join a globally respected value apparel group such as Pepkor and look forward to expanding and growing the Avenida business in Brazil. We are excited to leverage the core assets and competencies of the Pepkor Group as we continue our journey to fulfill our huge potential. ”
With high levels of corporate governance and reporting, a proven business model in Brazil and a similar culture and values to those of Pepkor, Avenida is a compelling addition to the Pepkor group.
About Pepkor
JSE-listed Pepkor has the largest retail store footprint in southern Africa with more than 5 470 stores operating across 10 African countries and includes trusted brands such as PEP, Ackermans, Incredible Connection, The Building Company, Tekkie Town and Bradlows. Established 100 years ago, Pepkor continues to provide South Africans with the right products, at the right price and at their convenience. Pepkor gives customers access to value-for-money products and services at the lowest prices. It delivers this value by using world-class systems and processes that ensure cost efficiency, as well as product quality.
About Avenida
Established 42 years ago and today with 2475 employees, Avenida is a one-stop apparel solution for value-seeking Brazilian families. The retailer offers a diversified product mix across two brands, Lojas Avenida and Giovanna. With 130 stores covering 11 out of 26 states, Avenida has a market-leading position in the core Midwest and Northern regions of Brazil.
