At present the UK High Street is continuing to struggle with low consumer spending, high operating costs and strong levels of competition forcing many retailers to cut their prices as a means of attracting customers. However, it seems that a new retail company will soon be entering into the highly competitive market, revolutionising consumer spending and putting further pressure upon chains such as Marks & Spencer, Next and TK Maxx.
South African billionaire Christo Wiese has this week confirmed the registration of a new brand at Companies House, known as Pepkor UK Retail Limited after Mr Wiese’s holding group of the same name. While this may not seem overly threatening to existing High Street brands, especially given the influx of American rivals entering the UK market of late, the fact that Mr Wiese has already recruited a highly experienced team of established directors – including former Asda boss Andy Bond – may be enough to turn a few heads in board rooms across the country.
Although nothing has yet been confirmed other than the initial company registration, it is believed that Mr Wiese intends to launch a new discount fashion chain aimed at mothers and children. Furthermore, this chain has been given the code name Project 50, as Pepkor is planning to open a staggering 50 stores throughout the UK within only two months of the official business launch.
According to industry rumours, Mr Wiese has contributed around £20 million as a start-up investment for the business and intends to bankroll the venture until it becomes profitable. This will allow for the ambitious 50 store footprint to be established, with property agent Savills already thought to be scouring the country for suitable stores measuring between 3,000 square feet and 5,000 square feet.
Pepkor released a statement to the press earlier this week, saying; “Pepkor UK can confirm today’s media speculation that it intends to launch a new chain of UK challenger fashion stores that will give shoppers on a budget remarkable value. “The stores will start at scale and adapt at pace, with the launch expected in the summer of 2015, focused on autumn and winter ranges.
“Pepkor UK was established to manage corporate activity in the UK and support the Pepkor group in making strategic acquisitions and investments in growing segments of the UK retail market.”
Pepkor certainly has a very interesting concept here, as it will not only take on established High Street brands but also hugely popular discount brands including Primark, H&M and Matalan. In addition, by making mothers with young children its primary target market, it will pose further problems for supermarkets by eating into “their” market share in the clothing and general merchandise sectors.
While analysts seem to believe Pepkor is taking a sizeable gamble by challenging the dominance of existing High Street retailers, it was only a few years ago that Primark did the same thing and resoundingly succeeded. Only time will tell whether Pepkor’s brand will manage to pull off the same remarkable feat and, potentially, revolutionise the High Street as we know it today.
Do you think Pepkor will be successful in launching a brand which appeals to the mothers and children’s markets?
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