New Clicks to sell Musica store leases to MTN

In terms of the agreement, MTN will take over Musica's rental obligations, certain store-related service contracts and permanent staff in the 17 stores.

The six stores where space has been released will be converted into separate MTN retail outlets.

Commenting on the transaction, New Clicks CEO David Kneale said: "The transaction will allow Musica to optimise trading locations for its entertainment offering to reach its middle and upper income market customers.

Musica will consolidate stores in some shopping centres where there are two stores, or in areas where two stores are trading in close proximity, as well as reducing space in some Musica outlets.

"Musica continues to open new stores that fit its property profile and we are also looking for opportunities to expand space in key trading locations."

MTN South Africa MD Tim Lowry said the transaction is in line with MTN's strategic objective to grow its South African branded store distribution footprint in key locations.

"The stores being taken over from Musica are all in prime locations and represent a significant step forward for MTN in achieving its objectives with regard to its branded channel retail footprint," he said.

The transaction is subject to certain conditions precedent, including landlords consenting to the assignment of the leases concerned to MTN.

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