{"id":862613,"date":"2026-06-05T09:05:14","date_gmt":"2026-06-05T07:05:14","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=862613"},"modified":"2026-06-05T09:05:17","modified_gmt":"2026-06-05T07:05:17","slug":"mr-price-takes-over-european-retailer-in-controversial-r9-6-billion-deal","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/862613\/mr-price-takes-over-european-retailer-in-controversial-r9-6-billion-deal\/","title":{"rendered":"Mr Price takes over European retailer in controversial R9.6 billion deal"},"content":{"rendered":"\n

Mr Price has taken control of European value retailer NKD, adding a large number of new stores to its base.<\/p>\n\n\n\n

Mr Price announced its plan to acquire 100% of the shares of Pegasus Group Holding GmbH, which trades as NKD Group\u2019s retail business, in December.<\/p>\n\n\n\n

The deal was valued at \u20ac487.00 million (roughly R9.6 billion at the time) and was funded by a combination of cash and debt.<\/p>\n\n\n\n

NKD operates in Germany, Austria, Italy, Croatia, Slovenia, the Czech Republic, and Poland, with over 2,100 stores. The company generated net sales of \u20ac684.57 million in 2024.<\/p>\n\n\n\n

The reaction to the deal was largely negative, with R6 billion wiped off Mr Price\u2019s market cap on the first day.<\/p>\n\n\n\n

Prominent critics of the deal have included 36One Asset Management and Benguela Global Fund Managers.<\/p>\n\n\n\n

Benguela said that the European retailer offers far lower margins, likely in the region of 1% to 2%, which are far below Mr Price\u2019s typical margin between 9% to 14%.<\/p>\n\n\n\n

It was also concerned by the billions in debt that the deal adds to Mr Price’s balance sheet. Mr Price’s balance sheet now includes R7 billion in interest-bearing loans. <\/p>\n\n\n\n

Despite the reservations over the deal, Mr Price’s management has confirmed that NKD joined the group in March 2026.<\/p>\n\n\n\n

“Clear areas of focus have been identified with the NKD management team, who are committed to achieving the guided forecasts communicated to investors,” the group said.<\/p>\n\n\n\n

While the group’s acquisition of NKD came after the close of the financial year ended 28 March 2026, the group’s post-year-end April trade was challenging in both South Africa and Europe.<\/p>\n\n\n\n

The group said confidence deteriorated amid the unexpected rise in inflation caused by the US-Iran conflict.<\/p>\n\n\n\n

It added that trade improved into May and early June, and is confident that its value chain agility enables it to respond positively to changing conditions. <\/p>\n\n\n\n

Financial results <\/h2>\n\n\n
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For the 52 weeks to 28 March 2026, Mr Price Group increased total revenue by 4.2% to R42.7 billion. <\/p>\n\n\n\n

That said, the group’s earnings were impacted by the expansion of all once-off transaction-related costs relating to the NKD deal.<\/p>\n\n\n\n

When using normalised figures, which exclude those costs, basic, headline and diluted headline earnings per share increased by 8.0%, 7.7% and 8.0%, respectively, on a normalised basis.<\/p>\n\n\n\n

On a statutory basis, basic, headline and diluted headline earnings per share of 1,449.5 cents, 1,453.9 cents and 1,411.8 cents, increased by 2.3%, 2.1% and 2.4%, respectively.<\/p>\n\n\n\n

The group also declared a final dividend of 592.8 cents per share, maintaining its pay-out ratio of 63%.<\/p>\n\n\n\n

While the group said that household income showed some signs of recovery in 2025, the discretionary retail sector was not an immediate beneficiary of this improvement.<\/p>\n\n\n\n

The prior year’s results also benefited from withdrawals due to the introduction of the two-pot retirement system in South Africa.<\/p>\n\n\n\n

Despite the challenging retail environment, the group still opened 196 new stores, supporting a weighted-average space growth rate of 3.6%. <\/p>\n\n\n\n

Looking ahead, Mr Price CEO Mark Blair said that there is optimism about South Africa’s long-term prospects.<\/p>\n\n\n\n

“However, the conflict in Iran has brought uncertainty in the short term, and we are focused on ensuring that we manage the impacts,” said Blair.<\/p>\n\n\n\n

For FY2027, the group is expected to spend R1.1 billion in capital expenditure<\/p>\n\n\n\n

in South Africa, with about 180 new stores, store revamps, supply chain and technology investment. <\/p>\n\n\n\n

Given the introduction of structural debt, the group said that its focus on balance sheet and treasury
management will be prioritised.<\/p>\n\n\n\n

In Europe, NKD’s capital expenditure is forecast to be \u20ac24m (R454 million) and incorporates about 150 new stores.<\/p>\n\n\n

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\n","protected":false},"excerpt":{"rendered":"

Mr Price has officially taken over NKD despite massive concerns over the European retailer’s prospects.<\/p>\n","protected":false},"author":95,"featured_media":862620,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[2910,24355],"class_list":["post-862613","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-mr-price","tag-nkd"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862613","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=862613"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862613\/revisions"}],"predecessor-version":[{"id":862628,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/862613\/revisions\/862628"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/862620"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=862613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=862613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=862613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}