A leading shoe retailing conglomerate is about to emerge in the Netherlands after the proposed acquisition of Scapino, the Dutch discount retailer, by the Macintosh Retail Group, which already runs the more upmarket Dolcis, Invito and Manfield stores in the Netherlands, along with a sports shoe banner called PRO Sport.

Both parties refused to disclose the price of the deal, which still has to be approved by the shareholders of Macintosh, a listed company, as well as the works councils of the two companies and the Dutch competition authorities. Macintosh estimates that the proposed combination would control a leading share of about 13 percent in the Dutch shoe market.

Scapino currently belongs to Retail Network, a holding company which groups several Dutch specialist retail chains. Retail Network itself is controlled by CVC Capital, the British-based venture capital firm, which acquired the stores from the much larger Vendex KBB retail group a few years ago. Scapino is entirely owned by Retail Network, but two of the retailer’s managers, Steven de Raat and Roelof Pothof, have small stakes in this holding company. One is the chief executive and the other is the chief financial officer.

The Dutch discount shoe retailer, which is investing in a new store image, boasted sales of about €220 million last year, with 184 stores in the Netherlands, another 25 in Belgium and 7 in Germany. Broken down by product, the revenues consist of 65 percent of footwear, 25 percent for apparel and 10 percent for bags and other accessories.

Meanwhile, the shoe retail arm of the Macintosh Retail Group, called Hoogenbosch, netted sales of about €165 million last year, up by 0.8 percent in spite of the fact that it operated on average six stores less than during the previous year. Since their withdrawal from Belgium and Germany, all the 221 Hoogenbosch shoe stores are located in the Netherlands.

According to Macintosh, Scapino neatly complements the Hoogenbosch business, adding a large network in the discount market. While Scapino stores are large outlets, with an average surface of 800 square meters and located in secondary shopping districts, the Hoogenbosch stores are much smaller and located on prime shopping streets: the Dolcis store formula, for example, has an average surface of 250 sqm., while some of the PRO Sport stores are just 100 sqm..

Macintosh believes that Scapino has considerable growth prospects in the Netherlands, where it is budgeting 25 store openings over the next three years. Another purpose of the tie-up is to benefit from purchasing synergies. While Scapino sources its footwear through agents, Hoogenbosch has its own sourcing office in the Far East – which should enable Macintosh to easily improve margins at Scapino.

Macintosh hopes to complete the acquisition by the middle of March, and to put it into effect retro-actively from the beginning of February. The acquisition will not require any share issues, and the buyer indicates that it will immediately contribute to its profits per share.