{"id":773866,"date":"2024-05-27T09:19:01","date_gmt":"2024-05-27T07:19:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=773866"},"modified":"2024-05-27T09:30:13","modified_gmt":"2024-05-27T07:30:13","slug":"pick-n-pay-is-making-a-big-change-to-survive","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/773866\/pick-n-pay-is-making-a-big-change-to-survive\/","title":{"rendered":"Pick n Pay is making a big change to survive"},"content":{"rendered":"\n

Retail group Pick n Pay is leaning harder on its currently more successful Boxer brand, with progress being made to spin the business off with its own public listing and converting some Pick n Pay-branded stores to Boxer stores.<\/p>\n\n\n\n

According to Pick n Pay group chairman, Gareth Ackerman\u2014who will be retiring from the role in 2025\u2014the success of the Boxer brand within the Pick n Pay stable proves that the group’s financial and operation struggles over the past few years were more than external factors hitting the business.<\/p>\n\n\n\n

For the year ended 25 February 2024 (FY24), the group delivered a R3 billion loss, impacted by increased interest charges due to increased gearing and a R2.8 billion non-cash store asset impairment in the group\u2019s Pick n Pay grocery business.<\/p>\n\n\n\n

Sales in the group grew 5.4% (2.9% on a like-for-like basis) to over R108 billion in South Africa, but this was largely driven by Boxer stores, which saw sales boosted by 17.3%, versus just 0.3% at Pick n Pay stores. Boxer stores now account for 34% of sales participation.<\/p>\n\n\n\n

While Pick n Pay stores posted a R1.5 billion trading loss (from R1.3 billion profit before), Boxer saw its trading profit increase to R1.9 billion (from R1.8 billion before).<\/p>\n\n\n

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Pick n Pay’s ‘new’ strategy (dubbed Ekuseni) in 2022 has been halted in its tracks – while Boxer’s expansion continues. The Boxer segment saw customer growth of 14% and basket growth of 2.9%, and 50 new stores were opened.<\/p>\n\n\n\n

To leverage this remarkable performance in what has otherwise been a dismal set of results, Ackerman said that Pick n Pay will use Boxer as a core pillar of its recapitalisation plan, with the group aiming to raise R12 billion.<\/p>\n\n\n\n

“Given the position in which we found ourselves, the board has elected to do a R4 billion rights issue which is supported by the Ackerman family,” he said.<\/p>\n\n\n\n

“This will be followed by an IPO of our Boxer business, hopefully by the end of 2024<\/strong>.”<\/p>\n\n\n\n

According to the group, it hopes to raise between R10 billion and R12 billion through a R4 billion rights offer later this year, as well as R6 billion and R8 billion from the Boxer IPO.<\/p>\n\n\n\n

Within the 2025 financial year, the group will also move to convert some of its existing Pick n Pay stores into Boxer stores, ‘where customer demand and demographics call for it’.<\/p>\n\n\n\n

\u201cMulti-year loss-making stores that are unsuitable for conversion to franchise or Boxer will be closed,\u201d said the group.<\/p>\n\n\n\n

\n\n\n\n

Read: Massive loss for Pick n Pay<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Pick n Pay is making an about turn on its previous strategy, with new big plans to lean on the shining star in its portfolio.<\/p>\n","protected":false},"author":10,"featured_media":722252,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26,4067],"class_list":["post-773866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline","tag-pick-n-pay"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=773866"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773866\/revisions"}],"predecessor-version":[{"id":773891,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773866\/revisions\/773891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/722252"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=773866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=773866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=773866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}