13 October 2011
South African retail chain Woolworths has entered into a joint venture with listed Nigerian firm Chellarams Plc that will see the two companies open three Woolworths stores in December, with plans to open seven more over the next two years.
Two stores will open in Lagos, one at The Palms and the other at Ikega, while the third store will open in Polo Park in Enugu State in Nigeria.
“We are confident about our investment in Nigeria and we are very pleased with the growth prospects of the Nigerian market,” Woolworths International executive John Fraser said in a statement this week. “The country has a large population with significant and growing middle and upper income groups.
“We have found the right partner in Chellarams Plc to grow the Woolworths brand in Nigeria.”
Accelerating African expansion
The joint venture is part of Woolworths’ plans to accelerate its expansion into other African countries. “Joint ventures with local partners such as Chellarams Plc is the new business model for our expansion plans in other African countries,” said Fraser.
“We have moved away from the franchise model we had in the past in some African countries.
“It’s not only a better profit model for Woolworths, but it’s also better for customers.”
The company used such a joint venture model last month when it partnered with businessman and former franchise partner Ali Mufuruki to open stores in Tanzania and Uganda.
Woolworths aims to open 16 stores in African countries this year taking the total number of stores to 60 in the current financial year.
The new stores will be larger than current ones, with retail space increasing by 42% in the current financial year and by an estimated 145% over the next three years on the continent.
Woolworths has had a presence in African countries for over 10 years and currently has stores in Botswana, Ghana, Kenya, Lesotho, Mozambique, Namibia, Swaziland, Tanzania, Uganda and Zambia.
Woolworths also intends to open stores Angola.
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