RMB Ventures beefs up portfolio company’s exposure to menswear

RMB Ventures assists in beefing up portfolio company’s exposure to menswear

RMB Ventures, the private equity arm of RMB, has assisted and enabled one of its portfolio companies, Blue Falcon 188 Trading (trading out of storefronts such as  Studio 88, Skipper Bar and Side-Step, which sell global brand names such as Nike, Adidas‚ Ellese, Puma‚ Converse and Vans), to purchase the iconic 70-year old menswear retailer John Craig, in a deal that will save in excess of 400 hundred jobs.

When John Craig, with a footprint in excess of 100 stores and the largest stockist of the Polo brand in South Africa came up for sale by Pepkor, RMB Ventures advised the management team of the Studio 88 group of companies to facilitate the transaction.  The acquisition will see the repositioning and revival of this long established business, and will return it to its former pre-eminent positioning as a leading “house of brands”  in SA’s fast growing men’s clothing and apparel space. The acquisition rationale - leveraging Studio 88’s knowledge of brand retailing and the locational overlap with its exiting store footprint - was seen as the ideal opportunity to rapidly improve profitability for the benefit of customers, employees, suppliers and stakeholders.

RMB Ventures takes long-term stakes in companies and partner with management teams with the objective of sustainable growth. In this instance, the management team looked beyond the decline in the market for formal wear as people are increasingly working from home, and realised that Studio 88’s stores’ success in selling aspirational and trendy international brands would dovetail perfectly with the John Craig’s existing customer base - locational overlap with Studio 88’s existing store footprint being an additional key driver.

For Studio 88, with its deep understanding of the customer segment and the management of brand retailing in SA, the purchase of John Craig was an opportunity to further diversify within the emerging market menswear segment. The deal was approved by the Competition Tribunal on the condition that no John Craig staff get retrenched for the next two years, thereby saving hundreds of jobs. Those who had lost jobs as a result of store closures would also be first in line when vacancies became available under the terms of the deal approval. It was also agreed that Studio 88 would, on a best endevours basis, look to rework the John Craig supply chain to continue supporting and potentially grow the chain’s off-take from local manufacturers.

RMB Ventures has a long-term investment mindset with the objective of creating sustainable value and broadening the strategic horizons of growth for its portfolio companies. Adding additional exclusive international brands to the Studio 88 group of companies adds to their compelling offering, and sets up the group for future growth. Since RMB Ventures’ investment in Studio 88 in 2012, the group has already grown its store footprint from 126 stores to the current 680.

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