West Pack, one of South Africa’s most recognisable retail brands, has new owners after entering business rescue proceedings in 2024.

The brand’s new owners recently announced their big plans for West Pack, specifically focusing on its franchise model.

West Pack entered voluntary business rescue in June 2024 after its board of directors adopted a resolution on 9 May 2024 to voluntarily commence business rescue proceedings.

West Pack comprises numerous companies, including West Pack Lifestyle, West Pack Lifestyle Distribution Centre, West Pack Franchise, Petzone, and Petzone Franchise.

The company’s related businesses include Café Estreito, Café Estreito Franchise, and Beija Flor Investments.

West Pack employs 924 employees, and the business rescue proceedings were aimed at saving the company and these jobs.

The company entered business rescue because it was financially distressed and unlikely to pay its debts when they became due.

West Pack explained that it became financially troubled because of its accelerated growth path, which strained cash flows.

The company said it opened stores too quickly and needed to stock them with inventory, which used up its cash reserves and made it difficult to repay debts.

In addition, the company was not buying the right products to meet customer demand, which led to unsold inventory. Cash flow limitations prevented the business from correcting this issue.

West Pack also pointed to South Africa’s struggling economy and load-shedding, saying these factors caused sales to decline and pushed the company into a loss.

At the time of entering business rescue, West Pack said there was a reasonable prospect of it being saved.

It explained that this process would allow the company to execute initiatives to restructure the business and drive its turnaround.

These initiatives included exploring offers to acquire some of West Pack’s assets or the whole business. It also considered a corporate finance transaction and selling non-core assets to improve its financial position.

At some point, there were rumours that major retailer SPAR may throw its hat in the ring and expand beyond its food segment to win more market share in South Africa.

However, ultimately, the West Pack Corporate stores were sold to an individual investor during the business rescue process, and West Pack Franchise was recently acquired by a new group of individual buyers.

West Pack after business rescue

West Pack has two main divisions – West Pack Franchise and West Pack Corporate. The Franchise division is composed of 66 individually owned stores operated by franchisees, all of whom work in alignment with the West Pack brand’s ethos.

In a recent press release, West Pack Franchise’s new owners said these stores have largely maintained customer loyalty and sales turnover throughout the business rescue process.

Currently, there are 66 franchisee-owned stores in the network, but the new owners are exploring several additional locations due to the strong demand for West Pack’s offering. 

In addition, the new owners said the West Pack Corporate stores, which were previously owned by the founders, will soon become part of the West Pack Franchise network.

“This acquisition marks an exciting new chapter in the life of West Pack, as we move forward with a renewed commitment to our customers, franchisees, and the broader community,” the new owners said.

They said this sale will ensure the continued success and stability of the retailer’s brand and the security of its franchisees. 

Looking ahead, the new owners said West Pack will continue to prioritise and expand its franchise model, focusing on strengthening the brand in regions where the brand currently has limited or no exposure. 

“We also offer exciting opportunities for new Franchisees to open stores or acquire existing ones at highly competitive prices, making it a great time to join the West Pack family,” they said.

In addition, as part of their recovery and growth efforts, the new owners said West Pack is working closely with its suppliers to launch a new marketing drive.

This drive will reward customers who remained loyal to the brand during the brand’s challenging year. “We are excited to give back to those who have stood by us,” they said.

“We are committed to rebuilding and expanding the brand, ensuring that both our customers and franchisees experience long-term success and satisfaction.”