WEDNESDAY, 11.30AM
RETAIL group Wooltru has bought the ailing retail chain of CNA in a deal valued at about R500-million. The acquisition will be funded by the issue of Wooltru shares. Wooltru executive chairman Colin Hall says that the buyout will not enhance Wooltru earnings over the next couple of years, and that investments will need to be made to bolster CNA’s declining fortunes. Headline earnings for the group were down 28% in the year to March 31.
Dennis Cuzen, CNA Gallo’s chief executive, says the tough retail climate in South Africa has been aggravated by CNA’s internal restructuring. Mark Lamberti, the Wooltru director who will be responsible for CNA, says the acquisition represents a broadening of Wooltru’s retail exposure. “This is an important development, supporting our strategic intent to acquire diversified retail assets which can benefit from our ownership,” he said.
Lamberti says Wooltru’s investment in CNA will be about R150-million over the next few years, and will concentrate on store and technology development, and operational logistics. The R500-million price tag comprises the acquisition of CNA, Constantia Greeting cards and three property companies, all bought from CNA Gallo. Analysts say the deal represents good value for Wooltru.
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