A Mr.Price store.[Photo/businessdaily]
South Africa-based Mr Price Group is now in direct control of its Kenya business after regaining its franchise from fashion apparel retailer Deacons East Africa.
The two firms on Thursday made it clear that Mr Price will from April 1 take over the operations of its 11 Mr Price stores in Kenya.
Deacons has been in control of Mr Price Kenya franchise for a decade.The Nairobi Securities Exchange-listed firm mid last month decided to sell the Mr Price Home and Mr Price apparel brands, which have been in Kenya since 2007, effectively ending Deacons’ 10-year franchise deal with the Johannesburg Stock Exchange-listed company.
“All money debts or liabilities due and owing the transferor in respect of the business up to the date of transfer shall be received and paid by the transferor,” they said.
“The transferee is not assuming nor is it intended to assume any liabilities incurred by the transferor in the business up to the date of transfer.”The Deacons board accepted the plans to sell its flagship Mr Price franchise in Kenya last October.
The proposed deal came after a 12 per cent drop in the income for the Johannesburg-based firm being its first decline in annual profit since 2001 as South African buyers reduced purchases in a struggling economy.
Deacons, which operates several branded stores in Kenya including Truworths, Angelo, 4u2, Reebok and Babyshop, has noted that its earnings for the full-year through December will come down by at least a quarter showing a tough operating environment.
Deacons’ exclusive franchise deal with another South Africa’s luxury fashion brand Woolworths came to an end in 2013 after the multinational took full ownership of its Kenyan subsidiary.
Deacons underwent a half-year net loss last year of Sh180 million.Deacons’ core business is to operate retail establishments such as franchise and department stores selling ladies, men’s and children’s clothing, footwear and accessories among other items in East Africa.
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