Dis-Chem picks up Baby City

Pharmacy group Dis-Chem is set to acquire baby care group Baby City for R430m, as the group pursues a stand-alone baby store network which can fit in with the group’s existing product offering. 

Dis-Chem plans to add clinic services to boost Baby City, and will also extend its loyalty programme to the group. Dis-Chem also intends to include its private label brands on Baby City’s shelves.

“The acquisition is a great cultural fit and has been a target of ours for many years,” said Dis-Chem CEO Ivan Saltzman.

“The brands and businesses were built with similar philosophies, ensuring management team alignment as we take steps to unlock the value we see in the Baby City brand,” he said.

For the year to February 2020, Baby City, which has a network of 33 SA stores, generated revenue of R855m. “It has continued to trade well relative to the Covid-19 lockdown environment demonstrating both the resilient nature of the industry and the inherent brand equity of the retailer,” Dis-Chem said.

Dis-Chem founder shareholders are the Aronoff family, and the group’s MD, Michel Aronoff, is set to retain his position. Baby City’s staff will also be retained, and the agreement is still subject to conditions, including approval from competition authorities.

In morning trade on Friday, Dis-Chem’s share price had risen 5.16% to R20.37, putting it on track for its best one-day performance in two weeks.

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