Pepkor, Leading African Clothing Retailer, Drives Growth in Brazil

01 Dec, 2023

Pepkor, Leading African Clothing Retailer, Drives Growth in Brazil

Pepkor Holdings Ltd., Africa's leading clothing retailer, is significantly boosting its investments in Brazil, strategically repositioning its operations in South America toward the discount segment.

According to Pepkor's latest earnings statement released on Wednesday, its Grupo Avenida SA arm substantially increased its sales contribution, nearly doubling to approximately 4.3% of the total revenue for the fiscal year ending on September 30. This surge has prompted the Cape Town-based company to revise its plans, now aiming to inaugurate 50 outlets annually in Brazil, more than doubling its initial target.

The potential success in Brazil holds promise for Pepkor, potentially paving the way for the retailer to venture into other emerging markets. Pieter Erasmus, the Chief Executive Officer, expressed this sentiment in an interview following the earnings announcement. He highlighted the company's ambitions, stating, "There are many emerging market economies where our expertise and capabilities can be effectively utilized. Succeeding in one international market can create opportunities worldwide."

With a rich history beginning in rural South Africa a century ago, Pepkor has expanded to encompass 5,917 outlets across 11 countries. The company's past experiences in Eastern Europe, now under Pepco Group N.V., serve as a testament to its international adaptability and growth strategy.

While Pepkor primarily focuses on organic growth, Erasmus also hinted at potential native market involvement, considering the prospect of expanding the retailer's offerings in adult clothing. He indicated the company's openness to acquisitions if the right opportunity arises and the price aligns with their strategic goals.