JSE-listed retail-led healthcare group Clicks has acquired the rest of the shareholding it doesn’t already own in Sorbet Holdings, for R105 million from Old Mutual Private Equity, giving the retailer its first taste at owning a franchise chain.
Clicks Group has owned a 25% stake in Sorbet Brands – which holds the Sorbet intellectual property – since 2015 and will now hold 100% of Sorbet group entities, it announced on Thursday.
Clicks shares were up 0.51% to R294.95 by 11:45 on Thursday.
The beauty salon franchise chain has over 190 outlets spread out across the country, operating under the Sorbet (all-round beauty therapy), Sorbet Man (men’s grooming) and Candi & Co (ethnic hair, treatments and hairstyling) brands.
In a statement Clicks CEO Bertina Engelbrecht said the Sorbet acquisition makes sense as the brand – which the retailer has already been stocking in its stores for a number of years – presents a natural strategic fit and aligns with the group’s health, beauty and wellness offering.
“Sorbet is a highly trusted brand, with a loyal and growing customer base, and we aim to capitalise on the opportunities to expand our presence together and accelerate revenue growth.”
“Since acquiring our shareholding in Sorbet Brands we have worked closely with the management team over the past seven years and developed a shared vision for the business,” Engelbrecht said.
“Sorbet has a strong and entrepreneurial management team, and we believe the business will complement the offering of our chain of over 850 Clicks stores nationwide,” she adds.
Sale was imminent
Old Mutual Private Equity co-head Jacci Myburgh said the sale of its holding in Sorbet has been part of the plan since the entity first acquired the beauty salon franchise, as part of its purchase of the Long4Life Group.
Long4Life Group successfully concluded its delisting from the JSE earlier this year, with the administration cost of holding a listing on the exchange and not being able to attract enough investor interest pushing it to join the Old Mutual arm.
“As Sorbet is below the size of investment that we would typically hold, our intent was always to sell the business to an appropriate owner,” Myburgh said.
“Clicks is a very logical owner of Sorbet, given that it is an existing joint venture stakeholder in the Sorbet brand.”
“We are extremely pleased to have left the business in the right hands while securing a good exit for our investors,” Myburgh adds.
CEO of Sorbet Group Linda Sinclair says the company looks forward to walking its next chapter with Clicks and hopes the partnership will deliver growth for the Sorbet business.
“Clicks has played an instrumental role in supporting the growth of Sorbet into becoming the leading professional beauty and grooming franchise brand in South Africa. Built on a culture of putting people first, our values are strongly aligned with Clicks and we look forward to delivering on future growth opportunities as part of the Clicks Group,” Sinclair said.
Listen: Clicks CEO Bertina Engelbrecht discusses the group’s annual results