Pick n Pay Ushers in New Era as Ackermans Lose Control
Image Source: Raymond Ackerman, centre, seen with sons Gareth and Jonathan at Pick n Pay’s 50th JSE listing anniversary. Image: Supplied
Published by Everything ZA News
In a significant shift in South Africa’s retail landscape, Pick n Pay’s ownership structure has officially changed, marking the end of the Ackerman family’s 57-year control of the iconic retailer. The decision comes amid financial challenges, with the group reporting a R3.2 billion loss for the financial year ending February 29, 2024 (FY24).
Despite profitable performances from Boxer and Pick n Pay Clothing, the core grocery business of the group faced severe setbacks, leading to a R2.8 billion non-cash impairment on the assets of Pick n Pay company-owned stores. In response, the group launched a two-step capital raise plan, starting with a R4 billion rights offer.
The rights offer was met with overwhelming success, being oversubscribed by 106%, with total subscriptions reaching R8 billion. The R4 billion raised is being used to pay down debt, stabilize the balance sheet, and invest in Pick n Pay’s turnaround strategy. As part of this offer, the Ackerman family reduced their voting rights from 52% to 49%, effectively relinquishing complete control over the company’s direction. The group stated that this 3% reduction in the Ackerman family’s voting rights was undertaken to support its transformation.
Raymond Ackerman founded Pick n Pay in its current form in 1967 after purchasing four stores with his wife, Wendy. Despite stepping down as chairman in 2010, the Ackerman family maintained control of the group until now. Gareth Ackerman, Raymond’s son, is set to resign as chairman after the release of the FY25 results, ending his 14-year tenure.
What’s Next for Pick n Pay?
The recapitalization of Pick n Pay forms one of six strategic priorities aimed at restoring profitability in the group’s core grocery stores while driving further growth in Boxer and Pick n Pay Clothing. According to the group, there are already measurable improvements in its core grocery business.
“The successful conclusion of the Rights Offer demonstrates the market’s strong confidence in our iconic brand and in our turnaround strategy,” said CEO Sean Summers. “It marks a crucial first step in our recapitalization plan, positioning the group well to fund long-term sustainable growth. We can now intensify our focus on our core Pick n Pay retail business. This achievement underscores our commitment to executing our strategy. We appreciate this incredible support from our shareholders.”
With the rights offer finalized, Pick n Pay has completed the first step in its recapitalization efforts. The second step will be listing Boxer on the Johannesburg Stock Exchange (JSE) later this year. Boxer, alongside Pick n Pay Clothing, has been a standout performer for the group, with overall group turnover increasing by 5.4% in FY24, driven by strong growth from Boxer (17.3%) and Pick n Pay Clothing standalone stores (17.0%).
However, despite the overall trading profit declining by 87.4% to R385 million, Boxer posted a trading profit of R1.9 billion, up from R1.8 billion in FY23. This performance highlights the importance of Boxer and Pick n Pay Clothing to the group’s future as it navigates a challenging operating environment.
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