Chellarams, Woolworths, Float N700m Firm 

 Date: March 5, 2013

One of Nigeria’s long-standing conglomerated listed on the Nigerian Stock Exchange (NSE), Chellarams Plc, has signed a joint venture business partnership with Woolworths of South Africa to establish Woolworth Retail Stores Nigeria Limited.

Both firms would be injecting N700 million into the Nigerian economy through the new company that will begin with three stores in December.

The three stores would be located in Palms Shopping Mall, Victoria Island; Ikeja City Mall, Lagos;  and Polo Park Shopping Mall, Enugu respectively.
Woolworth is a South Africa with large chains of retail  stores  and has 350 stores and  turnover of $4 billion.

On the other hand, Chellarams, which was established  in Nigeria in 1923, is a diversified organisation with operations in wholesale & distribution, manufacturing, engineering, tourism, quick-service restaurants and power generation.

The joint venture was consummated last week with the signing of the memorandum of understanding in Lagos.

Speaking   about the deal, the Woolworths  Divisional Executive, International, Mr. John Fraser and Group Managing Director of Chellarams, Mr. Suresh Chellaram, expressed confidence in the joint venture.

“Our joint venture means we can deliver to customers the best retail offering possible tailored to local market needs. Our partners bring knowledge of local trading conditions and we bring the quality, value, innovation and fashion our South Africa customers know and appreciate. It is the best of both worlds,” Fraser said.

He added that  the company was confident of  its  investment  in Nigeria and was very pleased with  the growth prospects of the Nigerian market.

“The country has a large population with significant and growing middle-and-upper income groups. We have found the right partner in Chellarams to grow the Woolworths brand in Nigeria,” he stated.

According to him, joint ventures with local partners, such as Chellarams, were the new business model for Woolworths’ expansion plans in other African countries. “We have moved away from the franchise model we had in some African countries. It is not only a better profit model for Woolworths, but it is also better for customers,” Fraser said.
On his part, Chellaram said the joint venture was another milestone in the company’s efforts to diversify.

“We are excited that we are bringing Woolworths back to Nigeria. We had won the franchise in 2002 but later shut down due to import restriction. But now we have joint venture, which is a better arrangement. Customers can now look forward to a larger selection of fashion and general merchandise that suit their needs. These include formal wear, casual wear, beauty products and home furnishing that are fashionable and trendy for men and women and children,” Chellaram said.

He disclosed that apart from the three stores the company would begin operations with,  seven more stores would be added to the chain of stores in next three years.