Tekkie laces up for run in Africa
BRAAM van Huyssteen ran one footwear Tekkie Town store for 10 years before he opened his second. Since then, the company has multiplied the Tekkie Town brand into a 265-store chain across South Africa.
It took the shoe and lifestyle brand supplier only 13 years to become one of the biggest distributors of Nike, adidas, Puma and Converse shoes in the country, turning over R1-billion a year.
The cash injection by global private equity company Actis of $65-million (R735-million) for a 42.5% stake in the business creates the platform to replicate this growth beyond the borders of South Africa.
One of the alluring features for linking up with Actis, among a long line of potential suitors, is the equity company’s expertise in emerging markets and in particular Africa.
In addition to the 254 stores across the country, the company has 10 stores in Namibia and one in Lesotho.
The plan is to move into Botswana next year and possibly Mozambique and Zambia the year after.
Actis is backing Tekkie Town’s existing management, led by founder Van Huyssteen, who will continue to be the majority shareholder and remain executive chairman.
David Cooke, director at Actis, will join the Tekkie Town board.
Actis said the deal fits with its entry into high-quality consumer-focused businesses, including fabric design company Vlisco Group and food group Edita. To date, Actis has invested $1.6-billion in the sector.
Cooke said Tekkie Town aligns with the private equity firm’s investment strategy — “brand aspirational, emerging middle-class consumers looking for quality products at real value”.
Tekkie Town MD Bernard Mostert said the company prided itself on carrying the widest range of brands and products.
Competitors include Edgars and Edgars Active in footwear, and the biggest single competitor is the sports division of TFG (with its Total Sport and Sports Scene brands).
In a higher LSM market, it competes with Cape Union Mart and Sportsman’s Warehouse.
“But we don’t have one specific eyeball-to-eyeball competitor,” he said.
There are no plans to go beyond Africa. “Our immediate focus is very region specific, and we will continue to create most of our growth organically but don’t rule out potential strategic acquisitions.”
Van Huyssteen was the South African winner of the Ernst & Young World Entrepreneur of the Year competition in 2011. Earlier this year, Tekkie Town was recognised by the World Economic Forum as a global growth company.