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Big-brand Edgars acquisition puts Retailability in the limelight

The group’s CEO previously worked for Massmart, Mr Price – and even Edcon.
Edgars is not a department store chain, but a fashion emporium, says Retailability CEO Norman Drieselmann. Image: Waldo Swiegers, Bloomberg

Three names – Retailability, Norman Drieselmann and Clifford Lines – are set to become more familiar in South Africa’s boardrooms, especially among retail landlords and competing retailers.

Durban-based Retailability, which finalised its purchase of the 91-year-old Edgars chain from beleaguered Edcon earlier this month, is led by Drieselmann as CEO. Lines is the group’s founder and current chair.

Its history goes back some 36 years, but many still wondered who is ‘Retailability?’ when it first emerged as the buyer of Edgars in July.

In fact, the group purchased the Legit chain from Edcon back in 2017. The R637 million, 217-store acquisition was announced in 2016 as part of Edcon’s initial restructuring, following US-based Bain Capital’s exit from the group.

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Retailability, which has financial backing by local private equity firm Metier, has returned to the limelight with the Edgars deal.

Drieselmann, who became CEO in 2015 when Metier came on board, tells Moneyweb that Retailability has historically “flown below the radar” and shied away from the spotlight.

While agreeing to the interview, he was loath to have his photo published with this feature, saying the focus has always been on the business itself. The group also has a modest head office building in Mount Edgecombe near Umhlanga, north of Durban.

Good grounding

As it turns out, Drieselmann has been in the retail game for over 18 years, having worked at JSE-listed retail giants Massmart and Mr Price, and even at Edcon itself at one point. He was a planning executive at Edcon back in 2007 during the group’s heydays under Steve Ross.

Before that Drieselmann was a planning and financial manager at Durban-headquartered Mr Price Group. Following his Edcon stint and prior to joining Retailability as CEO, he was a financial director at Massmart’s Makro division and CFO at the old Massdiscounters (which housed Game and DionWired stores) during the time Grant Pattison was CEO.

Coincidently, Pattison led Edcon’s latest turnaround plan as CEO until a few months ago, when the group was forced into a business rescue process due to a major blow from the Covid-19 economic fallout. As part of the business rescue, Edcon is being broken up and sold.

“I joined Retailability five years ago when Metier became involved as a private equity backer,” says Drieselmann. “Since then the group has expanded significantly with around 460 stores in South Africa and southern Africa, which includes the Legit acquisition.”

Besides his financial experience, he notes his merchandising planning positions at both Mr Price and Edcon. He will have to tap into this, with the Edgars deal taking the group’s scale to almost 600 stores and making it a sizeable player in South Africa’s clothing retail sector.

“I worked at Edcon when Steve Ross was still there, but before the various transitions since then.… I am not going to be critical of what happened to Edcon, but I believe Edgars is a great acquisition for Retailability,” says Drieselmann.

He did not want to divulge the investment value of the acquisition, as Retailability is privately owned and operated.

However, as reported by Moneyweb previously, the group probably also secured a bargain like JSE-listed TFG, which has acquired the value-retail Jet chain for R480 million as part of Edcon’s business rescue. TFG’s deal includes taking over 425 Jet stores in southern Africa (382 in SA and the balance in neighbouring African countries), 4 800 staff and around R800 million in stock.

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Retailability’s Edgars acquisition includes 130 stores in southern Africa, 120 of which are in South Africa. It is worth nothing that Edgars outlets have traditionally been department stores, which are anchor tenants in shopping centres and take up much more space than the average Jet or Legit store.

“With Retailability taking on around 5 200 Edgars staff, our overall business will effectively be doubling in size,” says Drieselmann.

“Edgars presents a wonderful growth prospect for the group as it gives us a new customer base.”

Besides Legit, the group owns the Beaver Canoe men’s chain of around 150 stores as well as the Style chain, which targets the lower end of the market with around 90 stores. The group’s stores are located across South Africa, Namibia, Botswana, Lesotho, and eSwatini.

“With the Edgars acquisition, Retailability will now account for around 600 000m2 of retail space across southern Africa. Edgars accounts for 475 000m2 of this space,” says Drieselmann.

He notes that while the women-focused Legit chain targets the mid-market and can be found in many malls, Retailability’s Beaver Canoe and Style chains are targeted toward townships, CBDs and rural areas.

Retailability’s Legit, Beaver Canoe and Style retail chains, together with its recent Edgars acquisition, take the group’s overall store count to almost 600 across southern Africa. Image: Supplied

“Our business overall is made up of mostly cash sales … You will find a Beaver Canoe store in a mall like Bridge City [KwaMashu] and our value discount Style stores are often found in strip malls next to a Pep or Shoprite store,” he says.

“Edgars gives us access to more of the mass market, particularly the middle to upper end of the market,” he adds.

“We have taken on only the most sustainable stores [130 of around 190 Edgars stores] and have restructured rental deals with landlords as part of our purchase of the chain.”

Drieselmann says that following Covid-19 and coming out of the initial lockdown, Retailability felt there was opportunity for acquisition within the market.

“This allowed us to be open to opportunities such as Edgars. The business rescue process made Edgars a viable target for us, and I reached out to Edcon.… We expressed interest in both Jet and Edgars. [However], through the initial due diligence we felt Edgars was a good fit for Retailability and focused on that brand.”

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Backed by Metier

Retailability’s Edgars acquisition has the full backing of Metier, according to Grant Howarth, a principal at the private equity group.

“Metier worked closely with the founder of Retailability and the management team on the Edgars acquisition, and is fully supportive of the transaction. We believe that Edgars offers a complementary fit to Retailability’s existing store brands and an attractive opportunity for growth,” he tells Moneyweb.

“Further, we believe that Retailability can utilise the successes and learnings from its acquisition of Legit in 2017 and use its dynamic and entrepreneurial operational style to re-focus Edgar’s on its core historical strengths,” he adds.

Howarth says Metier does not disclose the rand values of its specific investments, however, he notes that the group has a “significant minority shareholding in Retailability”. Lines is still the majority shareholder.

“Metier is an independently-owned private equity fund manager founded in 2004. The firm has an extensive track record spanning ten investment pools that have invested more than R8 billion and delivered IRR returns in excess of 30% across more than 100 transactions,” he adds.

Drieselmann believes Retailability will make Edgars work due to the group, as a privately-run enterprise, being more entrepreneurial and agile.

“We are bringing fresh eyes to the Edgars business and taking a more critical view.”

“For us, there are no sacred cows and we will make tough decisions if need be.… I am not going to bash its [Edgars/Edcon’s] old leadership, but Retailability’s entrepreneurial approach is different to that of a large corporate. We will be starting off a new slate with Edgars,” he says.

“Edgars is still pretty much seen as a big box format retail chain by landlords, but we will be looking long and hard at what the optimal size of our stores will be.

“We don’t see Edgars as a department store chain, but as a fashion emporium. Its two key pillars will be fashion and beauty, while we plan to exit homeware.”



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Very interested in where this will go. Retailability is a smaller fish swallowing a bigger one, so there’s a bit of risk there. Still quietly optimistic that part of Edcon is now in good hands with the right business culture and leadership for the job.

Durban is growing stronger and will become one of the best cities in the world! Very exciting plans in the pipeline.

No. It’s captured by the ANC.

End of comments.



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