Clicks Group: Acquires ARC Store Majority Stake for R507M

• Clicks Group acquired a 61% majority stake in specialist beauty retailer ARC Store for R507 million.
• The transaction increases Clicks' equity from 25.7% and is pending approval from South African competition authorities.
• ARC Store, founded in 2020, operates 12 locations and an e-commerce platform, serving the premium beauty market valued at over R6 billion annually.
• The acquisition leverages an existing operational relationship, including Clicks ClubCard integration and click-and-collect services.
• ARC's founding shareholders will retain a 39% non-controlling interest, and its executive management will remain until at least 2028.

The transaction's completion hinges on securing the necessary clearance from South African competition authorities, a process closely watched by M&A legal professionals.

JSE-listed Clicks Group Limited has significantly broadened its involvement in South Africa's high-end personal care sector by acquiring a majority stake in specialist beauty retailer ARC Store. The transaction, valued at R507 million, was confirmed in a Sens announcement on Monday, detailing Clicks' agreement to purchase an additional 35.3% interest from ARC's founding shareholders. This acquisition elevates Clicks' total equity holding from 25.7% to 61%.

ARC Store, established in 2020, operates 12 retail outlets situated in prominent shopping centers, including its flagship Sandton City location, which stands as the largest standalone beauty store on the African continent. The retailer also maintains an e-commerce platform, offering a curated selection of international luxury brands across categories such as skincare, makeup, fragrance, haircare, and bath and body. This strategic move positions Clicks more deeply within the premium beauty market, a segment currently valued at over R6 billion annually.

Clicks initially forged a relationship with ARC in 2021 through an initial minority stake acquisition. Its interest was subsequently increased to 25.7% in 2025. The current transaction ensures that ARC's existing founding shareholders will retain a 39% non-controlling interest, while the executive management team has committed to remaining with the business until at least 2028.

The acquisition builds upon an established operational partnership between the two retail entities. Since 2021, ARC has functioned as an affinity partner within the Clicks ClubCard loyalty ecosystem, fostering cross-brand engagement. This collaboration has yielded tangible results, with retail spending by registered ARC customers at Clicks increasing by 16% over the past year, reaching R836 million.

Furthermore, Clicks retail outlets serve as convenient physical pickup locations for ARC's online click-and-collect orders, enhancing logistical integration and driving foot traffic across both platforms. Bertina Engelbrecht, CEO of Clicks Group, articulated the rationale behind securing majority control, emphasizing the increased exposure to the expanding premium beauty market and the potential to leverage the combined strengths of both businesses for future growth. She highlighted the benefit of participating more fully in ARC's trajectory while retaining its founders and management.

A key aspect of the deal involves maintaining the leadership and unique identity of ARC Store. Jamie Lane, CEO of ARC, underscored the importance of preserving the company's distinct culture—characterized as entrepreneurial, customer-focused, innovative, and brand-led—as fundamental to achieving its ambitious expansion goals. The structured partnership aims to ensure this culture remains central as the business enters its next phase of growth.

The completion of this significant retail sector acquisition remains contingent on securing the necessary clearance from South African competition authorities. This regulatory approval process is a critical step for the transaction to proceed.

M&A lawyers are closely monitoring the competition authority's assessment of this deal, as its outcome and any conditions imposed could establish important precedents. Such decisions have the potential to influence future transactions and market consolidation strategies within South Africa's high-end personal care industry, shaping the competitive landscape for years to come.

M&A lawyers should monitor the competition authority's approval process for this significant retail sector acquisition, as its outcome and any imposed conditions could influence future transactions and market consolidation strategies within South Africa's high-end personal care industry.

Source: Information derived from company announcements.