DEG, one of the largest European development financiers, has invested ZAR100m in Retailability, a Southern African retail chain, which targets customers in the low to middle income bracket.

The investment was facilitated and led by the African private equity firm Metier through its Metier Capital Growth Fund II with co-investment support by Ke Nako, a South African fund of funds.

As a shareholder, DEG will support Metier in optimising Retailability’s management processes, expanding its business in terms of products and geographical reach, and boosting its position in the market. 

Furthermore, it will provide active support in implementing international best practices.

Retailability, located in Durban, was established in the late 1980’s and operates over 200 stores in South Africa, Namibia, Botswana and Zambia. 

The retailer offers low-price, fashionable clothing and footwear, for a young target group with its own brands, “Beaver Canoe” and “Style”.

Retailability is deploying the additional capital to expand its operations – as it has recently acquired the fashion retailer LEGIT that also operates in Southern Africa.

By acquiring the LEGIT retail chain, Retailability will gain over 200 additional stores for womenswear. 

Going forward, Retailability will employ more than 1,800 staff.

The investment in Retailability is not DEG's first co-investment with Metier, a third-party private equity fund manager. 

Through its various private equity funds, Metier specialises in equity capital investments in high-growth small and medium-sized enterprises and renewable energy projects. 

Wind farms, solar thermal and photovoltaic power plants are some of the joint investments realised to date. 

The Metier Capital Growth Fund II focuses on mid-market enterprises in the education, health, infrastructure, fast moving consumer goods and retail sectors in sub-Saharan Africa.

Paul Botha, Co-Founder and CEO of Metier, said: “We hope to continue developing the renewable area with DEG."

“We cooperate with DEG in the ESG form that adds great value to us. They provide strategy and guidance for us and we are tapping on their network, because they’ve been involved in African investment over the years,” he added.

DEG extends long-term financing to banks and funds, in addition to direct financing for companies.

DEG also utilises its activities to promote the integration of environmental and social standards with local financiers, and thus to also anchor these standards in the co-financed companies.