Pep and Ackermans owner Pepkor says it will continue pursuing further acquisitions as it chases scale, even after a year marked by heavy deal-making. But as the group lines up more targeted transactions, it says integrating multiple new businesses carries rising execution risk, with delays or weak integration threatening to dilute value and undermine the scale advantage at the heart of its strategy. The stakes are high, as the group is no longer just a clothing retailer but a growing ecosystem spanning stores, online, logistics, credit, insurance, cellular services and banking.
If these parts work together, the group will continue to grow profits and cut costs. If not, the complexity risks eroding the scale advantage it is betting on. During the 2025 financial year, Pepkor acquired Choice Clothing, entering the semiformal off-price adult wear segment.
Choice, which operates 105 stores, is expected to scale to more than 300 over time, supported by Pepkor’s sourcing, supply chain and financial services infrastructure. The group expanded further through the acquisition of Shoprite’s furniture businesses, OK Furniture and House & Home. The non-South African portion of the deal, comprising 66 stores, was implemented in October.
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The local component, which would add most of about 400 stores, remains delayed pending regulatory review after a legal challenge by competitor Lewis. Pepkor also acquired Legit, Swagga and Style from Retailability, adding 469 stores and significantly increasing its exposure to adult wear. The group strengthened its fintech ambitions through the acquisition of CloudBadger Technologies and regulatory approval to establish a banking presence at home.
Mergers, acquisitions and transformation projects are central to Pepkor’s long-term growth. However, complex integrations across retail, fintech, payments and lending can disrupt operations and dilute value if not managed carefully. With several large acquisitions under way simultaneously, the risk is rising.
Pepkor said complex integrations across retail, logistics, payments, lending and technology could disrupt operations or dilute returns unless carefully managed. “Poor benefit realisation or execution delays risk, undermining expected synergies and stakeholder confidence,” the group said. Pepkor said it plans to manage the risks by applying tight governance and disciplined programme management, with clear milestones and accountability.
The group will track whether deals deliver the cost savings, revenue growth and efficiency gains promised in their original business cases, while closely monitoring performance and compliance. Experienced integration teams will be used to limit disruption and ensure value is realised.
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