South African fashion brand, Mr Price, is set to take full ownership of its outlets in Kenya after buying out Deacons, a leading retailer in the region.
Deacons, whose operations in East Africa began in 2007, was previously the exclusive local franchise holder of the Mr Price clothes brand and Mr Price Home.
Mr Price is now set to take full control of the subsidiary, setting the stage for complete autonomy from Deacons.
“We had a franchise agreement that has worked extremely well over the years. Going forward, Mr Price will now be an independent brand run by MRP in Kenya,” said Deacons Chief Executive, Muchiri Wahome in a statement issued on May 8th, 2018.
Deacons will be compensated for ceding control of the franchise. Proceeds from the sale will go towards funding ongoing operations, launching an e-commerce platform, as well as the launch of a Deacons house brand and store expansion of the other international brands in its portfolio.
Mr Price is now expected to develop and run its own local retail outlets.
“The future is positive for Deacons as we will continue to bring relevant brands to market. The Directors have also decided to relaunch the Deacons label in order to have more control in its supply chain and focus on penetrating lower segments of the market. This coupled with an imminent launch of an e-commerce platform will ensure sustainable growth for the group,” Mr Muchiri added.
While Mr. Price has focused on selling its line of clothes and home products in Kenya, taking full ownership of the local subsidiary might see it expand its product range. For Deacons, the sale of its franchise rights ends its distributorship of Mr Price products, which served the middle class.
After ceding Mr. Price, Deacons will concentrate on its other international brands, which include F&F, Adidas, Deacons Kids, Bossini, 4U2, Truworths, and LifeFitness.
In a recent statement, Deacons noted that the retailer will remain committed to growing its customer base by offering lifestyle solutions to East Africa through its 30-store footprint in Kenya, Uganda and Rwanda.