Super Retail Group will buy New Zealand outdoor brand Macpac for $A135 million.
The ASX-listed retailer says it will call on existing debt facilities to acquire 54 Macpac stores across Australia and NZ, and consolidate its Rays outlets under the Macpac brand.
Super Retail Group, whose first-half profit has dropped to $72.2 million, says the deal should be completed by March 31.
Chief executive Peter Birtles says Macpac has performed extremely well over recent years and has the potential to become the leading outdoor adventure retailer in Australia and NZ.
Mr Birtles says market research and the group’s reformatting of Rays since 2016 has shown that there is a real need for a big box specialist in the $2.2 billion Australian adventure outdoors retail sector.
As a result, he says, the group has decided the best course of action is to acquire, consolidate and grow.
“Super Retail Group will be able to leverage its capabilities in supply chain, marketing, procurement and retail operations to add value to Macpac, while Macpac’s capabilities in design and apparel sourcing will add value to BCF and Rebel,” Mr Birtles said in a statement on Tuesday.
Macpac was founded in 1973 selling hiking packs in Christchurch and currently has 54 stores across Australia and NZ, offering primarily its own branded apparel, equipment and accessories.
It is expected to generate sales of about $NZ95 million ($A86 million) and pro-forma earnings before interest, tax, depreciation and amortisation of $NZ16 million ($A14 million) in the year to 31 March 2018.
Macpac’s key like-for-like sales growth for the nine months to December 31 was up nearly 7.4 per cent with total sales up by nearly 21 per cent.
Super Retail Group, which also owns Supercheap Auto and Rebel Sport, made a $72.2 million profit in the six months to December 30, down three per cent on a year ago.
Revenue was up 2.2 per cent at $1.3 billion.
The group’s auto sales – at Supercheap Auto and SRC – lifted 5.6 per cent lift to $516.7 million, and like-for-like sales grew 3.5 per cent.
BCF and Rays’ total sales fell 3.8 per cent, although like-for-like sales were up 1.6 per cent.
Total sales in its Rebel business rose 2.7 per cent, with the rebranding of Amart to Rebel completed, and like-for-like sales grew 1.1 per cent..
Mr Birtles said the year’s second half had started well with each division delivering like-for-like sales growth.
SUPER RETAIL GROUP LIFTS HY PROFIT
* Profit down 3pct to $72.2m
* Revenue up 2.2 pct to $1.3b
* Interim dividend unchanged at 21.5 cents, fully franked