Deacons East Africa, which runs Mr Price body wear franchise in Kenya, will transfer the business to a new company from April, which will mark the conclusion of the sale negotiation that began in October.
A notice sent by Deacons to the NSE today indicates that the franchise will be taken over by Mr Price (MRP) Kenya Ltd on 1st April this year subject to the fulfillment of certain undisclosed conditions surrounding the transaction. MRP Kenya Ltd is owned by MR Price Group based in Durban, South Africa.
The business has been transferred without any debts or liabilities, which means Deacons will shoulder all the company’s liabilities up to 30th January. “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 the transfer,” says Coulson Harney, the advocate acting for Deacons East Africa, in the notice.
READ ALSO: Huawei targets high growth in Kenya
The transaction has been on the table since October last year. Mr Price Kenya Ltd will from April operate all the 11 Mr Price retail outlets in Kenya. Deacons EA has been selling Mr Price products under a franchise deal. Reports that the two fashion companies could part ways emerged as early as 2013 when Deacons indicated Mr Price was seeking to go it alone in the Kenyan market.
Deacons operates other fashion brands in the country including Truworths, Identity, 4U2, Angelo, Adidas, Life Fitness and baby shop.
The high-end fashion retailer which runs similar businesses in Rwanda, Tanzania, Uganda and Mauritius has been going through lean times. Last year it issued a profit warning, indicating that its earnings would drop by at least 25% for the full year to December. The firm’s CEO Muchiri Wahome blamed this on the credit crunch due to the rate cap and closure of Nakumatt spaces which previously were driving traffic to its shops in shopping malls where they have outlets.
“Apart from that, the expected drop in profits was also brought about by the presidential elections in Kenya which resulted in decreased consumer demand and spending,” Mr Muchiri said.
Two years ago, Deacons sold its Woolworth franchise in Kenya to another South African fashion retailer Woolworths Holdings in a deal similar to Mr Price’s. Mr Price has been serving the lower end of the Deacons’ market. Since the Woolworth brand was sold, it has been the flagship brand at Deacons. It has also been contributing more than half of Deacon’s earnings.
Oxford launches guidebook for new curriculum
Oxford University Press (OUP) East Africa has, in partnership with teacher trainers, launched a free resource book in preparation for competency-based...
5 simple tricks Gordon Ogada used to win Sh230m mega jackpot
Gordon Paul Ogada, the guy from Kibera who won the SportPesa Mega Jackpot worth Ksh230,742,881 two weeks ago, is has...
Drivers to pay Sh5,000 for refresher course
NTSA will also subject the drivers to medical tests on conditions that my affect their daily duties in the road
Govt partners with Johnson & Johnson on cancer control
The National Cancer Control Strategy 2017-2022 is geared at reducing cancer incidences, morbidity and mortality in Kenya
Six-year-old boy creates high-tech computer game
EthanMan app is available for downloads on android play store for kids to read books and play games
Miguna makes fresh demand on passport
Judge Kimaru said the removal of Miguna Miguna from Kenya on February 6th was illegal and had no merit in...
Citizens to get Sh30,000 bonus as economy grows
Singapore expects an overall budget surplus equivalent to 2.1 percent of its GDP
Gold worth Sh100 million found at JKIA
The gold is alleged to have been in the custody of a 46-year-old Tanzanian man
Water crisis hits major towns as rivers dry up
Athi Water Services Board, which manages water resources in various urban areas, notes 75% of Nairobi residents do not get...
Ebola scare after a student dies in Keiyo South
County executive says they have already communicated with the ministry of Health headquarters and a sample sent to the Kenya...