Ackerman Family Relinquishes Control of Pick n Pay After a Tough Year

Pick & Pay Limited, one of Africa’s largest retailers, is facing a dramatic shakeup as the founding Ackerman family—which ranks among South Africa’s richest families—relinquishes control of the faltering firm. The move attempts to put Pick n Pay back on track for revenue and earnings growth.

Gareth Ackerman, chairman and son of the late retail mogul Raymond Ackerman, announced his resignation and a commitment to give up majority shareholder voting rights. This follows a “weak FY24 result” caused by severe losses in the main Pick n Pay supermarket operation, according to a Tuesday statement.

The move comes after a turbulent 2023 for Pick n Pay.The company reinstated previous CEO Sean Summers following a profit warning and its first interim deficit in over 20 years. South Africa’s difficult economic situation, coupled with high inflation, has reduced consumer spending, driving budget-conscious buyers to cheaper competitors.

Pick n Pay’s difficulties are evident in its financial performance. The company did not pay a dividend for the year, recorded an R2.8 billion ($153 million) impairment on its stores, and increased borrowings, resulting in higher interest payments. It also signed standby underwriting agreements with Absa Group, Rand Merchant Bank, and Standard Bank Group’s South African business. “The Ackerman family has been contemplating the need for renewal at Pick n Pay for some time,” stated Gareth Ackerman. “The recent difficulties presented an opportune moment to accelerate this process.” The Ackerman family’s investment vehicle has vowed to support Pick n Pay’s proposed R4 billion ($217 million) rights sale, a key component of its turnaround strategy.

Pick ‘n Pay, a South African retailer headquartered in Cape Town, with over 2,000 outlets in eight African nations. The Ackerman family, led by Gareth Ackerman, presently owns 25.53 percent (124,677,238 shares).

The company’s shares has dropped by 28% in the past year, ranking among the poorest performers on the Johannesburg shares Exchange (JSE). Pick & Pay has undertaken a leadership reshuffle in an effort to stop this trend. Gareth Ackerman stressed that handing up control is designed to allow CEO Pieter Summers and his team to spearhead the company’s transition.

Investors responded warmly to the news. Pick n Pay shares rose 6.3 percent on the JSE, bringing the company’s market capitalization above $680 million. Investors and other market participants are hoping that the leadership shakeup and strategic shift would help the company return to profitability. However, analysts are cautious. Questions remain concerning the success of the company’s turnaround strategy and Pick n Pay’s capacity to reclaim lost market share.

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