{"id":826710,"date":"2025-06-03T17:02:22","date_gmt":"2025-06-03T15:02:22","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=826710"},"modified":"2025-06-03T17:02:26","modified_gmt":"2025-06-03T15:02:26","slug":"brilliant-investment-that-turned-r186-million-into-r30-billion","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/826710\/brilliant-investment-that-turned-r186-million-into-r30-billion\/","title":{"rendered":"Brilliant investment that turned R186 million into R30 billion"},"content":{"rendered":"\n

Pick n Pay CEO Sean Summers bought Boxer in 2002 for R185.8 million. Today, it is worth R30 billion, making it one of the best investments in South Africa\u2019s corporate history.<\/p>\n\n\n\n

Boxer has its origins in Empangeni, KwaZulu-Natal, in 1977 when the founders started a store named KwaZulu Cash & Carry.<\/p>\n\n\n\n

KwaZulu Cash & Carry focused on supplying wholesale essential goods at low prices in the surrounding area.<\/p>\n\n\n\n

The company experienced rapid growth, driven by increased demand for its offerings among rural and peri-urban customers.<\/p>\n\n\n\n

To serve a larger group of customers, it repositioned its brand as a discount food retailer in the lower-income market and changed its name to Boxer Cash & Carry.<\/p>\n\n\n\n

Over the years, the “Cash & Carry” disappeared from the name, and the company became known as Boxer.<\/p>\n\n\n\n

In 2002, Pick n Pay, under the leadership of CEO Sean Summers, acquired Boxer for R185.8 million. At the time, Boxer had 37 stores in KwaZulu-Natal, Eastern Cape, and Mpumalanga.<\/p>\n\n\n\n

R149.9 million of the R185.8 million that Pick n Pay paid for Boxer was goodwill, which indicates that it paid significantly more than the fair market value of the net assets of the retailer.<\/p>\n\n\n\n

It raises questions about whether Pick n Pay overpaid for Boxer. The answer is a resounding no, based on Pick n Pay\u2019s strategy and what happened over the last 23 years.<\/p>\n\n\n\n

At the time, Pick n Pay was on an expansion drive and planned to open 95 new stores across all formats of the business.<\/p>\n\n\n\n

Boxer would help it to expand Pick n Pay’s reach into rural and peri-urban areas, specifically in KwaZulu-Natal and the Eastern Cape, where it was underrepresented.<\/p>\n\n\n\n

The strategy to use Boxer as a vehicle to compete in the discount grocery retail market across South Africa was a masterstroke.<\/p>\n\n\n\n

The retailer launched Boxer Build in 2004 and Boxer Liquors in 2009. It has also grown its store numbers at an annual compound growth rate of 14% since 1977.<\/p>\n\n\n\n

Today, Boxer has 525 stores, consisting of 320 Boxer Superstores, 175 Boxer Liquors, and 30 Boxer Build stores.<\/p>\n\n\n\n

Over the last year, Boxer launched 48 new stores, with plans to launch another 25 superstores and 35 liquor stores over the next year.<\/p>\n\n\n\n

Boxer grew its turnover by 10.4% to R42.3 billion and trading profit by 7.0% to R2.3 billion, with an exceptional 5.4% trading margin.<\/p>\n\n\n\n

The investment turned R186 million into R30 billion<\/h2>\n\n\n\n
\"\"<\/a>
Pick n Pay CEO Sean Summers<\/figcaption><\/figure>\n\n\n\n

Boxer was listed on the Johannesburg Stock Exchange (JSE) on 28 November 2024 following an initial public offering (IPO) which closed on 22 November 2024.<\/p>\n\n\n\n

The IPO concluded with 157.4 million shares being allocated to qualifying investors at a share price of R54 per Boxer share.<\/p>\n\n\n\n

This raised R8.5 billion for Pick n Pay, while retaining a 65.5% shareholding in Boxer. It was the final part of the retailer\u2019s two-step recapitalisation plan.<\/p>\n\n\n\n

The JSE listing also revealed what the market valued Boxer at. On the first day of trading, the share price jumped to R67.00.<\/p>\n\n\n\n

Boxer continued to trade between R63.00 and R72.50 per share, with the retailer\u2019s market cap hovering at around R30 billion.<\/p>\n\n\n\n

This means that Pick n Pay\u2019s R185.8 million investment grew to R30 billion. Boxer achieved this increase without Pick n Pay having to use capital to fuel this growth.<\/p>\n\n\n\n

Sean Summers, who returned as Pick n Pay CEO in 2023, said he felt an extraordinary sense of pride<\/a> in what the Boxer business has grown to become.<\/p>\n\n\n\n

\u201cWe saw the potential in Boxer over 23 years ago when we first bought the company, and I have no doubt it will grow as a formidable contender in the retail sector,\u201d he said.<\/p>\n\n\n\n

Interestingly, Summers\u2019 brilliant decision two decades ago to buy Boxer during his first tenure as CEO helped him save Pick n Pay during his second tenure.<\/p>\n\n\n\n

\u201cIt is extraordinary that it is Boxer to save the day for Pick n Pay and put the oxygen back into our lungs,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Pick n Pay CEO Sean Summers bought Boxer in 2002 for R185.8 million. Today, it is worth R30 billion, making it one of the best investments in South Africa\u2019s corporate history.<\/p>\n","protected":false},"author":10,"featured_media":805413,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[6655,22745,4067,19960],"class_list":["post-826710","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-boxer","tag-kwazulu-cash-carry","tag-pick-n-pay","tag-sean-summers"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826710","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=826710"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826710\/revisions"}],"predecessor-version":[{"id":826712,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/826710\/revisions\/826712"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/805413"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=826710"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=826710"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=826710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}