Pepkor Holdings Ltd., Africa’s foremost clothing retailer, is intensifying its presence in Brazil, strategically shifting its South American focus to the thriving discount market.
In a recent earnings disclosure, Pepkor highlighted the remarkable performance of its Grupo Avenida SA unit, contributing approximately 4.3% to revenue in the fiscal year through Sept. 30. The Cape Town-based company now sets an ambitious pace, planning to open 50 stores annually in Brazil, doubling the initial projection.
CEO Pieter Erasmus sees Brazil as a pivotal success that could unlock opportunities in other emerging markets. «If you can make one international market work, it opens up the world,» Erasmus remarked in an interview following the earnings report.
With a century-long legacy and a substantial global footprint, including 5,917 stores across 11 countries, Pepkor strategically avoids direct competition within regions where it operates. Erasmus hints at potential acquisitions in the home market, particularly in the adult clothing segment, emphasizing a balance between organic growth and strategic purchases.
The conglomerate, housing South African chains Ackermans, Pep, and Tekkie Town, is actively reviewing non-core assets, including the building division.
Despite challenges in the South African market, Pepkor remains committed to competitive pricing. Erasmus acknowledges the impact of port delays and power cuts on costs, particularly for imported materials used in locally made school uniforms. The company navigates macroeconomic challenges while prioritizing affordability.
In the face of a 1.1% decline in Pepkor shares in Johannesburg, the company remains resolute in its strategic expansion plans, emphasizing long-term growth over short-term market fluctuations.
As Pepkor charts its course in Brazil and eyes emerging market opportunities, the retail giant adapts and thrives in a dynamic global landscape, establishing itself as a key player in the evolving world of discount retail.
