Durban-headquartered retail group Mr Price said on Monday that it has reached an agreement to buy 100% of Yuppiechef, an “omnichannel” retail business focused on kitchenware, for about R470-million in cash.
The business has two primary operations: Yuppiechef Online, the retail division comprising the online platform and seven stores, as well as a wholesale division, which develops and imports branded goods for wholesale distribution.
Yuppiechef was started as a pure e-commerce company and since 2017 has transitioned into an omni-channel retail platform.
“The retail division represents 85% of turnover (70% via e-commerce) and has been a pioneer of online retail in South Africa, consistently winning awards throughout its history,” the JSE-listed Mr Price said in a statement to shareholders.
The deal, Mr Price said, will allow it to target a higher LSM customer base. It added that the deal meets its “strict investment criteria”, which guide its “capital allocation decisions and these have been applied with the same disciplined approach in the case of Yuppiechef”.
The exact value of the deal has not been disclosed, but Mr Price said the purchase consideration represents about 1% of its R47-billion market capitalisation, or R470-million.
“This will allow Mr Price to expand in South Africa, in line with its strategic objectives, through an established, high-growth omnichannel brand. Profitability is a key factor in the group’s consideration of any venture, and it is satisfied with Yuppiechef’s positive bottom-line performance and prospects for margin expansion.”
Mr Price CEO Mark Blair said the deal gives Mr Price “the opportunity to access the skills of a highly talented team and to service a new customer base”.
“Yuppiechef will benefit from our financial strength to accelerate growth plans, which include significantly broadening the product assortment into areas where we have well-established skills and expanding its physical presence beyond the currently limited number of stores,” Blair said.
“We were early adopters of e-commerce in South Africa and our consistent investment has really paid off for us. Yuppiechef gives us another platform to escalate our ambitions in online retail and enables us to be strategically positioned for further growth.”
The deal is subject to regulatory approval, including from the Competition Commission, as well as unspecified commercial conditions being met. Yuppiechef’s management team will continue to run the business “with the full support of the group’s executive team”. — © 2021 NewsCentral Media