Furniture and electrical appliances retailer, TV Sale & Home (TVSH) has acquired a 49 percent stake in bed maker, Restapedic and also separately established a joint venture lounge suite manufacturing company, an official has said.
The shareholding acquisition was at a cost of ZWL$2.5 million and was approved by the Competition and Tariff Commission in January this year, Axia Corporation chairman, Luke Ngwerume said.
Axia Corporation is TVSH's parent firm, which also owns Transerv, a retailer of automotive spares and logistics firm, Distribution Group Africa.
"Restapedic is a synergistic business to the group's portfolio which, together with other suppliers, will help in securing the supply chain of bedding units for TV Sales & Home," said Ngwerume.
The company is targeting to install new equipment next year, which will increase production.
Ngwerume said TVSH owns 70 percent of the lounge suite making business, named Legend Lounge, while its unnamed partner owns the remainder.
"This acquisition (Restapedic) and establishment (Legend Lounge) are part of the group's (Axia Corp) objectives to achieve organic and acquisitive growth as well as backward integration into manufacturing," said Ngwerume.
He said Legend Lounge had produced a range of lounge furniture which had significantly improved product selection and quality across all stores.
"The partnerships to promote local production are key in ensuring that supplies remain high," he said.
In its financial results for the full year ending June 30, 2019 released last week, Axia Corporation said TVSH recorded a turnover growth of 88 percent on back of a rise in both cash and credit sales.
"Due to operating efficiency, the business recorded better growth on operating profit than that achieved on turnover," Ngwerume said.
"Credit business was good until the last quarter of the financial year when affordability became a deterrent which saw volumes dip. This however was compensated by increased cash business."
During the year, TVSH opened four new stores in Banket, Gwanda, Harare and Masvingo.
"Two new stores are scheduled to open before the end of the first half of the new financial year in Victoria Falls and Rusape," Ngwerume said.
"The business will also focus on growing a market for its manufactured products both locally and regionally."