Taste broadens its jewellery division
Durban - Taste Holdings [JSE:TAS] has acquired luxury watch and jewellery retailer Arthur Kaplan from AKJ Holdings, for R85m cash in a move complementary to the franchised management group's strategy for competing in the upper income consumer market.
The acquisition is subject to certain suspensive conditions which are expected to be fulfilled by December 1.
AKJ Holdings owns and operates ten Arthur Kaplan branded outlets and one World's Finest Watches outlet in major South African shopping centres and is one of the leading retailers of Swiss watches nationally.
In the past 40 years, the group has established a reputation in the retail watch market as stockists of premium luxury brands including Rolex, Breitling, Omega, Tag Heuer and Longines and is among a select few retailers stocking these leading brands in multiple outlets.
The group also retails other leading luxury watch brands as well as fashion watch brands.
Arthur Kaplan retails luxury fine jewellery in collections under the Arthur Kaplan brand with a focus on engagement and bridal pieces.
Since opening in 2002, World's Finest Watches has, as the only specialist prestige watch boutique in Sandton, become an established destination for watch enthusiasts and collectors.
In the year to June 2014, Arthur Kaplan reported R224.3m in sales and adjusted profit after tax of R12.4m.
Taste Holdings CEO Carlo Gonzaga said Arthur Kaplan’s "affluent aspirational" target market complemented Taste's view that competing in the upper income consumer market had to be done via the best brands in their categories.
"Arthur Kaplan is a leader in the luxury Swiss watch segment in South Africa and Taste currently manages more than 25 watch brands in its existing jewellery business NWJ and retails these in 80 southern African locations," he said.
Arthur Kaplan's jewellery range is aligned to Taste's current manufacturing capability and Gonzaga believes there is potential to grow the Arthur Kaplan jewellery offerings and its revenue contribution.
This included growing the South African store numbers and satisfying the demand for luxury Swiss watches in sub-equatorial Africa.
"This market is currently underserved by dedicated retail offerings and the African focus and opportunity is aligned with that of the broader Taste group," said Gonzaga.
In terms of the deal, Dean Divaris from whose family trust Taste was purchasing a portion of the shares and who had been leading Arthur Kaplan for the past 14 years, would remain employed by the company and remain in his current role as managing director.