Hungry for Shoprite

29 September 2016 - 09:52 By Reuters

It would be a "natural development" for international retail group Steinhoff to take over Shoprite, Africa's biggest supermarket chain, South African retail tycoon Christo Wiese says. Wiese is the largest shareholder in budget store Shoprite as well as lower-end furniture, apparel and household goods retailer Steinhoff. Bringing the two together would allow him to add groceries to his sprawling discount empire.The merger, if it happens, would also pull together Wiese's retail assets under one roof following Steinhoff's $6-billion acquisition in 2014 of Pepkor and create a global retail giant worth at least $30-billion."People will speculate about that," he told Reuters in a rare interview at his modest offices overlooking factories in Parow."People know that I am 75 years old, and I fortunately have a son who is in business with me, but as a family we are continually looking at consolidating our business interests. So, it would be, in a way, a natural development."Since the Pepkor acquisition, some analysts have wondered if Wiese, with Shoprite's CE Whitey Basson and Steinhoff's Markus Jooste, were working on a tie-up.Wiese started Pepkor in Upington on the southern edges of the Kalahari desert in the 1960s after spotting an opportunity to bring cheaper clothes to the poor.He then transformed budget chain Shoprite from a six-store company in the 1970s to one with hundreds of stores across Africa, from South Africa to the Democratic Republic of Congo, dwarfing rivals including Wal-Mart's South African unit, Massmart.His discount strategy, which also now includes investments in clothes retailer New Look, has catapulted him to the cover of Forbes magazine as one of Africa's richest businessmen."Why is it so successful? The base is where your mass market is, where people have limited disposable income and we're aiming at that market," he said.Wiese is also a top shareholder and board member in South African investment heavyweight Brait , which last year bought gym chain Virgin Active, a relative outlier in his business model as it targets middle-class consumers.More in line with the low-cost theme was Brait's purchase of no-frills clothes retailer New Look.Wiese said Brait's "most obvious" growth trajectory was through its existing businesses that also include UK supermarket chain Iceland and South African staples foods maker Premier."New Look has identified China as a major growth area," he said.The Stellenbosch law graduate said he would like to stay out of politics. However, he said South Africa's leadership was hurting Africa's most industrialised economy, which is expected to grow below 1% this year."It is clear to a blind man that today the top leadership in the government is seen as a problem. It is not helping our economy. That is a fact of life," he said. ..

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