A gigantic French company with a penchant for multinational luxury products is in for a takeover of three safaris located in the tourism rich paradise in the northern part of Botswana, BusinessPost has established.
LVMH Moët Hennessy Louis Vuitton SE also known as LVMH is registered in Paris, France. The Euronext Paris listed company is controlled by the Arnault family. On top of the company is its chairman cum CEO Bernard Arnault, the fourth wealthiest man according to Forbes Magazine, who runs the company with his children; daughter Delphine is Bernard’s number two and Antoine is head of communications.
Bernard’s third child Alexandre runs German luggage brand Rimowa, which LVMH bought in 2016 while his fourth child Frédéric is a strategy and digital director of TAG Heuer, the largest watch brand owned by LVMH. The Arnault family owns a stake of 47 percent in LVMH through the family holding company called Groupe Arnault.
LVMH is known for luxury brands like the fashion house and luxury retail company known for leather clothing, Louis Vuitton. The other luxury brands by LVMH are the plush winery producer Moet and the elite cognac brandy of Hennessy. The company also has investments on real estate and hotel sectors. And according information seen by this publication, LVMH will soon be the owner of some accommodation property in Botswana in the form of 5 star rated safari lodges which are owned by Belmond, a company that is being purchased by the French company.
Last year the French company said it is planning on acquiring Belmond for $25.00 per Class A share in cash and this represents an equity value of $2.6 billion in a transaction with an enterprise value of $3.2 billion. The company revealed that time that the transaction would be completed in the first half of 2019 subject to the approval of Belmond’s shareholders and clearance by the relevant competition authorities.
It has emerged that Belmond has agreed to give the luxury dealer all its shares, meaning LVMH will now have sole ownership of the three safari lodges in Botswana; Belmond Kwai River Lodge, Belmond Savute Elephant Lodge and the Belmond Eagle Island Lodge. The three safari lodges were owned by Belmond. Belmond was partially owned by LVMH which indirectly owns the company (Belmond) with BlackRock Inc, Dimensional Fund Advisors LP, Capital Research Global Investors, The Vanguard Group, Southeastern Asset Management Inc and Giuseppe Statuto.
Belmond whose directors are; Roland Hernandez, Harsha V. Agadi, Mitchell Hochberg (all American), Ruth Kennedy, Ian Livingston, Demetra Pinsent, Gail Rebuck (all British) and H. Roeland Vos (Belgium) is listed on the New York Stock Exchange. Apart from owning safari lodges in Botswana, Belmond is a luxury hotel company and adventure travel operator that operates 46 properties which include 33 deluxe hotels, 3 safari lodges, one stand-alone restaurant, seven tourist trains and two river/canal cruise businesses. Belmond also operates famous trains and cruises in Europe, Peru and Asia.
LVMH is expected to add luxury, a word synonymous with the French company, to the already 5 Star rated plushy Belmond lodges located between the Okavango Delta, the rich tourist attract area of Moremi Game Reserve and the wildlife thronged Chobe National Park. The Belmond safari lodges in Botswana are part of the group’s world operations which translated a revenue improvement of $1.1 million, from $35.6 million to $36.7 million. The marginal increase in Belmond’s world operations revenues are said to be due to impending of refurbishment at Belmond Savute Elephant Lodge which was closed from November 2017 to June 2018.
Belmond recorded total revenues of $572 million and adjusted EBITDA of $140 million in the twelve months ended 30m September 2018. Belmond’s Net losses for the full year 2018 were $28.5 million ($0.28 per common share), compared to net losses of $45.0 million ($0.44 per common share) for the full year 2017.
This publication has not been able to get Belmond and LVMH’s take on this recent acquisition which will see the French’s biggest luxury company lonely spreading its wing into Africa and specifically Botswana’s paradise which is the region’s tourist focal point. The local antitrust body, Competition Authority, is expected to rule on the Belmond-LVMH merger. LVMH is said to have given the local antitrust body notification for its intentions to acquire Belmond-a move which will see the French luxury company take full control of three safari lodges ploughed on Botswana’s tourist area.
LVMH chairman Arnault said in the company’s website last year that the acquisition of Belmond will significantly increase his company’s presence in the ultimate hospitality world. “Belmond delivers unique experiences to discerning travelers and owns a number of exceptional assets in the most desirable destinations. Its heritage, its innovative services, its excellence in execution and its entrepreneurship resonates well with the values of the Group and is complementary to our own Cheval Blanc maisons and the Bvlgari hotels activities,” said Arnault in the company’s website.
In an interview with BusinessPost Belmond head of communication, Jocelyn Betts said LVMH taking over the company does not mean its operations will change as Belmond will still own the three safari lodges. “Belmond has three luxury lodges in Botswana and we do not anticipate any foreseeable change to our portfolio in this market as a result of the transaction with LVMH. Under LVMH ownership, we look forward to taking our brand to new heights and to continuing to expand our portfolio of luxury travel experiences,” said Betts.
In the coming months prices will go up and inflation will shoot sharply above the target of 3 percent to 6 percent towards the third quarter of 2021, the Bank of Botswana on the other hand will continue to withhold its knife on the Bank Rate. This is according to a forecast made by Kgori Capital in its recent Market Watch Segment.
Statistics from Statistics Botswana show that the recent 1.8 percent increase in the September inflation, from 1 percent in August, was a reflection of the upward adjustment in public transport fares (Transport (from -6.9 to -3.9 percent) in September 2020, which is estimated to have increased inflation by approximately 0.64 percentage points.
Local anti-trust body, Competition and Consumer Authority (CCA), this month received back to back acquisition proposals from South African clothing retailers to wipe out their former rivals, Edcon, from Botswana malls.
Last week BusinessPost was in possession of Merger Notice No 23 of 2020 whereby a South African clothing retailer owner, Retailability Proprietary Limited, through Oclin Proprietary Limited, proposed to acquire parts of the Edgars business conducted by Edcon in Botswana (through Edcon Botswana), as a going concern, consisting of certain assets and identified liabilities.
South African government’s Business Rescue Practitioners earlier this year announced that Retailability will buy Edgars, after the latter filed for a business rescue plan in April after it failed to pay suppliers. This move will see Retailability add Edgars to its portfolio consisting of brands such as; Legit, Beaver Canoe and Style.
Retailability landed on Botswana shores 18 years ago with its flamboyant urban fashion Style which had 17 stores. Style, having almost the same target market as Edgars as it offers men’s and ladies’ contemporary and formal fashion, gave the 91 year old legendary clothing retailer a run for its money, and has won the battle as its parent company has taken over Edgars.
Retailability brands are synonymous with Botswana shopping centres and there are currently five (5) Beaver Canoe stores, 10 Style stores and seven (7) Legit stores across this country. The Beaver Canoe stores sell clothing apparel for men and boys only. The Legit stores have a fashion store format which focuses on the retailing of clothing, footwear, accessories, colour cosmetics and cellular products.
Retailability operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and Eswatini. Many observers suggest that because of the deal with Retailability to swallow Edcon, most Edgars stores in Botswana will change their name and be branded Style. A sad tale for religious consumers of the Edgars trademark who got used to love their favourite brand for years.
According to CCA’s Merger Notice No 23 of 2020, Retailability is controlled by Clifford Raymond Lines (through a company which functions solely as a holding company of his interests in Retailability) and Metier Investment and Advisory Services Proprietary Limited (“Metier”). Metier is a private equity enterprise with investments in a number of industries spanning from healthcare, hospitality, FMCGs and telecommunications.
Retailability directors are mostly South Africans; Clifford Raymond Lines, Mark Richard Friday and Norman Victor Drieselmann. Only Nasreen Essack, who was appointed February this year, is a Motswana. He comes after Brian Thuto Tsima left on the same date. Retailability 100 percent owns Oclin Proprietary Limited, the company it is acquiring Edgars with, by a capacity of 3000 shares.
The target business, Edgars, offer textiles, cosmetics and cellular products. Edcon has a Motswana director, Charles Mzwandile Vikisi, a South African, Shane Van Niekerk and Zimbabwean Jethro Kamutsi.
“The Target Business comprises of two (2) Edgars franchise brands and private label stores across Botswana. These stores target middle to upper income customers and are home to a range of private label brands such as Free2BU, Charter Club and Stone Harbour, and a wide range of market label brands (such as Levi’s and Guess) for clothing, footwear and cosmetics.
In addition, the Target Business operates iconic Edgars Home and Edgars Beauty stores as store-in-store formats rounding out the department store offering in Botswana,” said CCA. Foshini also lines up to take Jet Botswana from Edcon.
The Foschini Group (TFG) released a statement confirming its latest intentions to acquire Edcon assets or Jet for a cash purchase consideration of R480 million. This was after the business rescue practitioners offered TFG to buy Jet by that amount.
CCA is currently mulling on a proposed merger by TFG to take over Jet operations in Botswana. Merger Notice No 21 of 2020 from TFG came a few days before the Retailability proposal. In this merger TFG, acting through Foschini Botswana, want to take over “parts” of the Jet business conducted by Edcon through Jet Supermarkets Botswana.
TFG will be willing to add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents. TFG will also get Jet’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. Also part of this fat deal is that the company is looking to also acquire JET Club and all existing JET stock of no less than R800 million.
Johannesburg listed TGF owns Foschini Retail Group which owns the local operations called Foschini Botswana, the acquiring enterprise according to CCA merger notice. “TFG is not controlled by any enterprise/s and for completeness, the three largest shareholders of TFG holding shares greater than 5% as at 27th March 2020 are: Government Employees Pension Fund (16.2%) Public Investment Corporation (13.2%); Old Mutual Limited (6.7%); and Investec Asset Management (6.3%). The remaining issued share capital in TFG is widely held,” said the merger notice.
Only Abdool Rahim Khan is a Motswana in the Foschini Botswana directorship, the rest; Ganeswari Shani Naidoo, Anthony Edward Thunström and Gustav Jansen (alternate director) are South Africans.
According to the CCA merger, the Jet Business is Edcon’s discount department store division, selling clothing, footwear, homeware and some cosmetics as well as cellular products and targets lower-to-middle income consumers throughout Botswana. The Jet Business does not directly or indirectly control any enterprises, says the notice. CCA seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication to the following address.
Botswana Communications Regulatory Authority BOCRA signed a memorandum of Agreement (MoA) with the Ministries of Transport and Communications (MTC), Basic Education (MoBE) as well as Local Government and Rural Development (MLGRD).
The MoA seeks to continue the collaboration that dates back to 2016 when the three parties first agreed to work together in a project aimed at computerizing and providing broadband Internet to primary schools in remote and underserved areas of Botswana.
The project benefitted 68 primary schools and 9 secondary schools through the construction of Local Area Network (LAN) in each primary school, provision of 5 Mbps dedicated broadband Internet to each Primary School and provision of Wi-Fi enabled tablets, laptops and related peripherals such as printers and copiers.
Further, the project will see the augmentation of computers in 9 Junior Secondary Schools with 30 laptops per identified school and employment of Information Technology (IT) officers at each primary school.
When speaking at the signing ceremony in Gaborone, Chief Executive of BOCRA and Chairperson of Universal Access and Service Fund (UASF) Board of Trustees Martin Mokgware said the project’s ultimate goal is to facilitate pupils in schools and host villages to be able to play a meaningful role in the digital economy.
Mokgware indicated that this necessitates upgrading of existing Telecommunications infrastructure to high capacity broadband that will support delivery of education, accessibility to the quality Internet and usage of ICTs.
The Fund began its inaugural programme by sponsoring the provision of WiFi hotspots in public areas around the country as its first project. Following the successful implementation of public WiFi hotspots, the Fund identified Kgalagadi, Ghanzi and Mabutsane areas for mobile network upgrades, schools computerization and internet provision.
Conscious that the project would not be possible without buy-in and support from MoBE, MTC and MLGRD, the Fund facilitated the signing of the first MoU between the three parties in 2016 for implementation of the project.
BOCRA Chief Executive said the signing of this agreement is aimed at benefitting the Kweneng District, adding that they have already assessed the area and have determined that they will be covering 62 underserved villages and 119 schools, 91 of which are primary schools.
“This is a project for which the partner Ministries need to re-commit for its success. Lessons from the previous schools’ computerization and internet connectivity project require that we increase our involvement and resources dedicated to the project for it to be successful. It is my belief as the project coordinator, that we will not do things the way we did them during the first project, for if we do, then we will not have learnt anything,” he said at the signing ceremony.
The purpose of learning is so that there can be continuous improvement to minimize the length of time and amount of resources utilized, he said expressing confidence that their partners will step up to the plate and ensure they play their part in the implementation of the project and that it will progress smoothly having already tread along a similar path.
UASF’s role lies mainly in funding and project management. According to Mokgware, once the project is completed, the work to integrate ICTs into the classroom begins in earnest. Therefore, he said, the project will not succeed without full cooperation and oversight of partners.
“MoBE will put in place the necessary content and ensure that the curriculum is available to all. MLGRD will provide, among others, the enabling environment by ensuring readiness of the school’s infrastructure and necessary security.”