DEG invests ZAR100m in Southern African fashion retailer

JOHANNESBURG (Capital Markets in Africa)- DEG is providing ZAR 100 million to Southern African retail chain, Retailability (Pty) Limited which targets customers in the low to middle income bracket. Retailability is deploying the additional capital to expand its operations – as it has recently acquired the fashion retailer LEGIT that also operates in Southern Africa. The investment was facilitated and led by the African Private Equity firm Metier through its Metier Capital Growth Fund II with co-investment support by Ke Nako, a South African Fund of Funds.

Retailability, located in Durban, was established in the late 1980’s and operates over 200 stores in South Africa, Namibia, Botswana and Zambia. The retailer offers low-price, fashionable clothing and footwear, for a young target group with its own brands, “Beaver Canoe” and “Style”. The “Beaver Canoe” brand stores sell menswear, while the “Style” stores cater for the whole family. By acquiring the LEGIT retail chain, Retailability will gain over 200 additional stores for womenswear. Going forward, Retailability will employ more than 1,800 staff.

As a shareholder, DEG will support Metier in optimising Retailability’s management processes, expanding its business in terms of products and geographical reach, and boosting its position in the market. Furthermore, it will provide active support in implementing international best practices.

The investment in Retailability is not DEG’s first co-investment with the Southern African investment company, Metier. Metier through its various private equity funds specialises in equity capital investments in high-growth small and medium-sized enterprises and renewable energy projects. Wind farms, solar thermal and photovoltaic power plants are some of the joint investments realised to date. The Metier Capital Growth Fund II focuses on mid-market enterprises in the education, health, infrastructure, fast moving consumer goods and retail sectors in sub-Saharan Africa.

DEG, one of the largest European development financiers, extends long-term financing to banks and funds, in addition to direct financing for companies. These local financiers are in a strong position, i.e. sufficiently close to the customer to be able to finance and advise small and medium-sized enterprises in developing countries in an appropriate manner. DEG also utilises its activities to promote the integration of environmental and social standards with local financiers, and thus to also anchor these standards in the co-financed companies.