Deacons (East Africa) has entered into a sale agreement with South Africa’s Mr Price Group in relation to the proposed sale of Mr Price Franchised Business in Kenya.
The fashion dealer had firm issued a cautionary notice on October 9 regarding the deal.
In a public announcement issued on Tuesday, Deacons (East Africa) notified its shareholders
and the general public that pursuant to the new agreement, Mr Price shall purchase the Mr Price Franchised Business in Kenya from the company.
“The Proposed Transaction is subject to various conditions precedent, including but not
limited to requisite approvals by the relevant regulatory authorities and the shareholders
of Deacons,” the notice read.
Last week, the company issued a profit warning, saying it expects full year earning for 2017 to drop by more 25% compared to the year ending 31 December 2016. It cited the uncertainties that were brought about by the presidential elections in Kenya during the second half period of 2017 which resulted to decreased consumer demand and spending, as among the causes of the decrease.
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Other causes cited by Deacons CEO Muchiri Wahome were the non-performance and closure of some branches of major anchor tenants in several shopping malls which reduced traffic into the shopping malls and the prolonged drought that was experienced in the country in 2017 which led to increased inflationary pressure and a reduction in disposable income, coupled with the lack of consumer credit from the banks, that had a direct impact on customer shopping trends.
The retailer also took a beating from increased availability of retail space which has cannibalised the market thus leading to a decrease in foot traffic into all malls, according to Wahome.
