WOOLWORTHS said on Tuesday that it had signed
agreements to purchase its franchise businesses in Botswana, Namibia, Swaziland
and Ghana.This marks the end of franchise stores in African
countries for the retailer.
Woolworths, like other retailers, is expanding its
footprint on the continent as urbanisation and rising affluence fuel a boom in
fast-growing cities, with a middle class clamouring for high-quality goods.
Investments in other African countries in future
will either be focused on company stores or joint ventures with Woolworths.
The group has a presence in 12 African countries
including Tanzania.
Woolworths CEO Ian Moir said the transaction gave
the group a business of scale, lifted profitability of its African operations
and positioned it for growth in these countries. The 33 stores in the countries
are predominantly clothing and general merchandise but Botswana has a significant
food business.
The addition of the stores brings the combined
retail turnover in African countries close to R1bn a year.
The franchise stores were previously managed by Ish
Handa, who will become a nonexecutive director of Woolworths in both Botswana
and Namibia on conclusion of the deal, which is subject to competition
commission approval in Namibia, Botswana and Swaziland. It plans to have about
82 stores in Africa outside of its home market by 2016.
Woolworths group retail operations and international
director Paula Disberry this week said that the economic and socio-demographic
trends in Africa were working in favour of modern retail and Woolworths’
positioning.
"The growth in sub-Saharan Africa has been over
5% for the last three years," she said at the World Retail Congress Africa
in Sandton. The group has launched its WRewards loyalty programme to the
Zambian and Mauritian markets, where 45% of its sales can now be tracked.
"We have introduced store cards and a credit
offering in Kenya and we will roll out our store card to all our African
countries," Ms Disberry said.
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