Marka PJSC, the UAE's first public joint stock company focused on the fast growing retail and hospitality sectors, yesterday announced that it has agreed to acquire Retailcorp UAE LLC, a subsidiary of Istithmar (a Dubai World company), in a deal valued above Dh220 million subject to adjustments at final closing.
Through the deal, Marka has cemented a solid foundation in the high-growth sports retail sector, the company said. The acquisition, which will be funded by a blend of the company's own funds and bank facilities, gives Marka ownership of a network of 15 sporting goods outlets in some of the most highly sought after retail locations in the UAE, with rights to sell sports products manufactured by the world's most respected brands including Nike, Reebok and adidas. Mall locations include Mall of the Emirates, Mirdif City Centre, Ibn Battuta Mall, Abu Dhabi Mall and Al Ain Mall.
Jamal Al Hai, Chairman of Marka, said, "We are pleased to have agreed this significant deal to acquire Retailcorp, one of the largest retail companies in the UAE's sporting goods sector. This acquisition is in line with our strategy to establish a diverse portfolio of assets and successful businesses. This deal also bolsters and diversifies Marka's revenue sources, our bottom line, and the value we bring to our shareholders." The acquisition was agreed after intensive negotiations and due diligence that continued over several months, Mr. Al Hai added.
Khaled Almheiri, Vice-Chairman of Marka, said, "We are confident that this acquisition will have an immediate positive impact on Marka's revenues and profits. It will position Marka to become operationally profitable in 2015, its first full year of operations, which will reflect positively on Marka and its shareholders, who number approximately 6,000." Almheiri also said, "This deal adds value to Marka because retail and hospitality related to sports, including sports equipment outlets and sports-themed restaurants and cafes associated with famous clubs and athletes, constitute one of the three key business sectors on which Marka focuses, the other two being fashion and hospitality." Nick Peel, CEO of Marka, said, "The growth of the sports retail segment in the UAE and the region is outpacing what we are seeing on the global level. This is a result of factors ranging from strong population growth, rising income levels, and the pursuit of a growing number of citizens and residents adopting a healthy lifestyle, in part due to the UAE government's support of the sports sector." Marka aims to expand the network of the sporting goods stores under the brand name of "Modell's Sporting Goods" in the UAE and the region, Peel confirmed.
The chain of stores in the UAE and the region will be the first to carry the Modell's brand outside the United States. It is a franchise of Modell's Sporting Goods, one of the most prestigious family-owned firms focused on sports fashion products in the US. Founded in 1889, it now includes a chain of 155 stores in the US.
Source: WAM