Major retailer in South Africa changing in a big way

The retailer opened its doors in 2008 and quickly grew to become one of South Africa’s most recognisable brands. 

However, the group faced extreme pressures due to the Covid-19 pandemic and its accelerated expansion strategy, which spread its finances too thin. 

As too many stores opened too quickly, the group sstruggled to stock its stores with the requisite inventory. The company then used its cash reserves to do so, making it hard to repay debts. 

This pushed the company into business rescue in the middle of 2024. 

However, a group of individual buyers saved the company, which should ensure the brand’s continued success and stability and the security of its franchisees.

The company has emerged from business rescue with a renewed strategy centred on franchising, ensuring the group is positioned for stability and growth in a challenging economic climate.

“We grew too fast, too quickly, and we’ve learnt from that,” said Chris Da Silva, Director of West Pack Lifestyle. 

“By moving to a franchise model, we’re giving entrepreneurs the opportunity to own and run their stores while keeping the brand strong, resilient and agile.”

Over 40 West Pack Lifestyle stores across the country are operational and trading under the franchised model. 

There are plans to open three more outlets before the end of the year. 

Each franchise is capped at a maximum of five stores per owner, a decision designed to keep businesses manageable and closely aligned with the group’s ethos of owner-driven retail. 

“By going back to basics, we’ve secured a sustainable future for the brand,” said Da Silva.

“We have to slow down to grow again, and this model ensures that if one store experiences difficulty, it doesn’t compromise the entire business.”

West Pack Lifestyle did stress that only its franchised and fully stocked outlets remain part of the group.

Some stores trading under the West Pack name are no longer affiliated with the brand following the Business Rescue procedure. 

West Pack Lifestyle also remains a South African-focused business, with around 70% of its product ranges supplied by South African companies.

Even when importing, the group works through local suppliers to ensure benefits flow into the domestic economy.

Looking ahead, Da Silva said that the brand is excited to welcome new franchisees and continue supporting South Africans who have remained loyal in difficult times. 

“We’re alive and well, and this next chapter is about building a stronger, more sustainable business for our franchisees, our staff, and our customers.”

Some survive, others not so lucky

Although the West Pack Lifestyle Brand may have exited business rescue proceedings, other companies are not as lucky.

South Africa has seen two big-name companies head for winding down or liquidation in the past week after business rescue plans fell through.

120-year old engineering firm Murray & Roberts is shutting down after it was left with no assets following its business rescue.

The group’s main commercial unit entered into business rescue in November 2024 after what it called a “perfect storm” of setbacks.

Through the business rescue plan, various assets would be sold off to a consortium to pay creditors a fraction of what was owed to them, and Murray & Roberts Holdings would not get anything.

The sale of the assets also left the group with no commercial operation, and thus no way to earn revenue. A creditor has applied for the company to be liquidated, and it will not oppose it.

The other closure this month is the state-owned Mango Airlines, which will be winding down after its investor walked away.

Mango was in business rescue for four years, having suffered from the Covid-19 lockdowns and being tied to South African Airways, which was itself struggling to stay in the air.

After years of tussles with government departments and creditors, the investor that was to acquire the company had enough and walked away from the deal in July.

The business rescue plan then moved to a structured winding down process.

Other iconic companies have also gone the way of closure. Ellies Group was liquidated in 2024 after its business rescue practitioners saw no reasonable chance of the business being rescued.

However, as with West Pack, some businesses survive.

AutoZone, the largest privately owned distributor of auto parts, spares, and car accessories in South Africa, also entered business rescue as it could not pay off its debts following a troubled private equity takeover. 

But the group was also saved from business rescue last year after JSE-listed Metair acquired it for just under R300 million.

Issued on BusinessTech by Luke Fraser | https://businesstech.co.za/news/business/835508/major-retailer-in-south-africa-changing-in-a-big-way/