Dubai: Fashion retailer Marka has agreed to acquire Retailcorp UAE, a subsidiary of Istithmar World, which is part of government-owned Dubai World, for more than Dh220 million, in a move that is expected to make the company profitable next year.
“We are confident that this acquisition will have an immediate positive impact on Marka’s revenues and profits,” Khaled Almheiri, vice-chairman of Marka, said in a statement on Sunday. The acquisition by the retailer allows it to own 15 sporting goods outlets and have rights to sell products by brands such as Nike, Reebok and adidas, according to the statement. The outlets are located at Mall of the Emirates, Mirdif City Centre, Ibn Battuta Mall, Abu Dhabi Mall and Al Ain Mall.
The takeover will be financed by the company’s own funds and banks. It is subject to adjustments at final closing, the company said.
Following the announcement, Marka’s shares on the Dubai Financial Market closed at Dh1.40 on Sunday, up 12 per cent compared with the last trading session.
The acquisition comes as Dubai World raises funds to meet large debt repayments following a $25 billion restructuring in 2011. The company needs to repay $4.4 billion in May 2015 as per the restructuring terms.
Port operator DP World agreed last month to buy logistic infrastructure company Economic Zones World, part of Dubai World, for $2.6 billion. DP World said the acquisition is likely to be completed in the second quarter of 2015.
Last year, Istithmar sold its Atlantis hotel to holding company Investment Corporation of Dubai.
Marka filed an initial public offering in September, the first one in Dubai after a five-year hiatus.
Nick Peel, Marka chief executive, recently told Gulf News that the retailer is “pursuing an ambitious growth strategy with a balanced combination of operating franchise agreements with leading brands and unique hospitality concepts developed with globally renowned partners.”
As part of its growth strategy, the company recently acquired premium retail locations including the second phase of Meraas Holding’s City Walk and Yas Mall in Abu Dhabi.
Marka is planning to open four retail outlets in Dubai next year and more than 35 by 2020. It also aims to expand the number of Modell’s sporting goods stores in the UAE and the region.
“Marka’s acquisition [of Retailcorp UAE] allows it to be present in the UAE’s fast-growing sports goods segment. It is expected to have a compound annual growth rate of five per cent over the next five years, reaching Dh1.6 billion in 2019,” Nikola Kosutic, research manager at research firm Euromonitor International, told Gulf News by phone.
