Media24 and Takealot have formally announced that online fashion brands Spree and Superbalist will merge.
The merger will create an “exciting online fashion platform for South African consumers”.
“In South Africa, the penetration of online retail sales is currently around 1%, while in the USA, China, and the UK it is in excess of 13%,” said the companies in a joint statement.
“Clothing and footwear sales in the UK drive a large share of the growth of online retail, with similar trends in the USA. This suggests there is room to build a substantial position in the online footwear and apparel market in South Africa.”
Spree and Superbalist, both part of the Naspers group, do not integrate operations currently – including their buying, technical, marketing, warehousing, and logistics functions – despite targeting a similar audience.
“Merging the two businesses into a single entity will create a larger, more focused platform on which to build a substantial online retail, footwear, and apparel business.”
The new venture will be held 51% by Media24, Spree’s current shareholders, while Takealot will own 49% of the venture.
“Takealot will be responsible for the day-to-day operations and management of the business.”
The merger will be effective from 1 July 2018 and is not subject to Competition Commission Approval.
“The merged entity will undergo a two-to-three month period of integration planning and implementation, during which each business will continue to operate independently before final integration.”
Takealot Group CEO Kim Reid told MyBroadband that the two businesses will fall under a new entity, FashionCo.
“This is not a consumer-facing brand, but rather a new entity. Takealot will have management responsibility for FashionCo,” said Reid.
Reid added that during the integration phase, “many decisions will be made, including around brands”.
“We are very excited about the opportunity to further accelerate the growth of online fashion retail in South Africa. We look forward to welcoming Spree into the Takealot Group.”