The acquisition was driven by Peter Lucas, the chief executive of UK menswear supply business BMB Group. Lucas was appointed chairman of Al Arafa's retail arm earlier this year. He was charged with expanding the group's European operations via acquisitions and joint ventures.
SRG has 71 stores under the Suits You, Racing Green and Young's formal hire brands. It employs 600 people and has sales of £63 million.
The value of the deal was not disclosed.
Dr Alaa Arafa, chairman of Arafa Holding said: "As the Arafa Group develops its interests across Europe, a retail acquisition in the UK of a business that is currently a major customer to our group, is a logical development. This acquisition is being made as a standalone development opportunity for the group and is not linked to Arafa Holdings other investments in Europe."
The transaction will complete on March 31.
Arafa Holding is amongst a number of suppliers to have bought into retail businesses in recent months. Indian supplier Alok acquired a majority stake in QS last year and Select was rescued last month by Cafer Mahiroglu, who also owns a Turkish supply business. To read the Drapers analysis of suppliers entering the retail sector click here.