By: Retail Brief Africa

One of South Africa’s leading retail brands, West Pack Lifestyle, has voluntarily initiated business rescue proceedings to keep the group afloat and save more than 1,000 jobs due to the high capital costs of opening new stores in search of market share gains.

Matuson Associates announced details about the business rescue proceedings of West Pack Lifestyle in early May 2024.

West Pack’s board of directors adopted a resolution on 9 May 2024 to voluntarily commence business rescue proceedings. The notice of the beginning of business rescue proceedings was filed with the Companies and Intellectual Property Commission on 15 May 2024.

The company nominated Grant Chittenden, Jenna Osborne and Lance Schapiro to be its joint business rescue practitioners.

West Pack has 52 stores across South Africa, Lesotho, eSwatini, and Namibia, and employs 924 people.

West Pack has numerous companies under its umbrella, including West Pack Lifestyle, West Pack Lifestyle Distribution Centre, West Pack Franchise, Petzone, and Petzone Franchise, Café Estreito, Café Estreito Franchise, and Beija Flor Investments.

The retailer cited its accelerated growth path, South Africa’s struggling economy, and the effects of load shedding as the key contributors to its turnover steadily declining over the last few months, not meeting its budgeted revenue.

According to Business Tech, West Pack said that despite these challenges, there was a reasonable prospect of the company being saved, and it is now executing initiatives to restructure the business and drive its turnaround.

These initiatives include exploring offers to acquire some of West Pack’s assets or the full business, as well as considering a corporate finance transaction and selling non-core assets to improve its financial position.

Operationally, it is looking at improving procurement procedures to achieve optimal stock levels and a better product mix and further reducing overhead expenses.

West Pack said that with the implementation of the above initiatives, there will be a reasonable prospect of rescuing the company.