Spar Group has agreed to buy a majority stake in the company that owns the brand in Switzerland as the South African food and liquor retailer seeks to boost growth outside its home market.

Spar will buy 60 percent of Spar Switzerland for 44.5 million Swiss francs (R678m), the company said yesterday.

The sellers will keep the remaining 40 percent for at least five years.

“The acquisition represents an opportunity for the company to invest in an established business in a stable market with growth potential,” Spar said.

“It will allow the company to enhance its scale and provides further foreign currency diversification benefits.”

South African retailers including Truworths International and The Foschini Group have been expanding outside their home market to offset weak domestic consumer confidence and generate sales in currencies other than the rand.

In 2014, Spar bought the company that owns the brand in Ireland and south-west England.

The Spar brand was founded in the Netherlands in 1932 and has more than 12 000 retail stores across 40 countries.

BLOOMBERG