Top South African retailer lost R10.5 billion in four months

Mr Price has been punished by shareholders since the announcement of its acquisition of German retailer NKD Group in December 2025.

Between 10 December 2025, when the deal was first announced, and 1 April 2026, the retailer’s share price is down nearly 15%.

This equates to a market cap loss of around R10.5 billion – almost R1 billion more than the roughly R9.5 billion it paid to acquire NKD.

Since the deal was announced, several Mr Price shareholders have been vocal in their dissent, with one even taking the matter to the JSE and Financial Services Tribunal (FST), though this case was dismissed.

Shareholders were concerned about a variety of aspects related to the deal, including the price, which constituted around 5% of Mr Price’s market cap at the time.

Other concerns included the viability of a European expansion, given that many local retailers had struggled before, and an alleged lack of detail and transparency regarding the deal.

This displeasure has been reflected in the retailer’s share price. On the day the deal was announced, Mr Price’s shares fell by as much as 12%.

However, it did not stop there, as the retailer’s share price continued to fall in the months that followed and is now down around 10% year to date.

The latest share price development followed Mr Price and NKD’s investor presentation on 17 March 2026.

This presentation was specifically aimed at addressing investor concerns regarding the deal and outlined the South African retailer’s expansion plans for NKD.

The presentation had a mixed reception – the share price initially gained 2% following the event, but then extended its losses in the days that followed.

Today, Mr Price’s share price sits at around R155 per share, down significantly from R195.06 on 10 December, the day the deal was announced. This equates to a market cap loss of around R10.5 billion.

Notably, this means the retailer’s market cap loss exceeds the amount it paid for NKD, which was €487 million, or around R9.5 billion.

Shareholder scepticism

Benguela Global Fund Managers’ head of research, who appealed to the JSE and FST to reclassify Mr Price’s NKD acquisition, Victor Seanie, told Daily Investor that the presentation did little to assuage his concerns.

While he said the presentation provided interesting insights into NKD’s business, such as its data science tools, historic GP margin trajectory and overlap with SHEIN customers, “it did not reassure us”.

“Unfortunately, other important metrics such as pre-IFRS 16 EBIT margins and free cash flow margins were not disclosed,” he said.

“Some key questions asked by analysts went unanswered. Mainly, the easy, less material questions were addressed.”

He also raised concerns regarding Mr Price’s growth projections for NKD over the next five years.

In the presentation, Mr Price CEO Mark Blair outlined growth plans for the German retailer, which included a potential expansion into other European countries.

Currently, NKD operates in 2,100 stores across Germany, Austria, Italy, Slovenia, Croatia, the Czech Republic, and Poland.

By 2030, Mr Price hopes to grow NKD’s net sales from its current €712 million (R13.89 billion) to around €1 billion (R19.50 billion).

This, Blair said, would support NKD’s gross margin, which is projected to increase from 61.6% in 2024 to between 62% and 64% in 2030.

Mr Price is eyeing an EBIT margin of 8% to 10% for 2030, up from 4% in 2024, and a compound annual growth rate (CAGR) of 15% to 20% for EBIT over that same period.

NKD is also projected to increase its store footprint to 2,700 stores by 2030, which would require it to add 100 stores to its network every year.

Seanie told Daily Investor that, given the intense competition among European value retailers, NKD’s competitive disadvantages, and Europe’s low GDP growth, “Mr Price’s forecasts seem optimistic”.

He identified NKD’s weaknesses as scale and brand recognition. He also pointed out that NKD’s revenue CAGR between 2019 and 2024 was 3.1%, far lower than the roughly 6.5% Mr Price is targeting by 2030.

Ultimately, Seanie said Benguela’s view on the transaction has not changed following Mr Price’s investor presentation.

The tables below show Mr Price’s growth projections for NKD over the next five years, shared in the presentation.

A tough road ahead

Daily Investor also reached out to Urquhart Partners’ Richard Cheesman, who said that while Mr Price’s presentation did not sufficiently address investors’ concerns, it would have been difficult to do so.

“The market’s reaction following the recent capital markets day on the NKD acquisition reflects ongoing investor scepticism,” he said.

Regarding Mr Price’s growth projections for NKD, Cheesman said they are achievable in principle, “but appear ambitious relative to NKD’s historical performance”. 

“More conservative investors are likely to take the under on this proposition,” he said.

To make the acquisition a success, Cheesman said execution against the stated growth plans will be key.

He added that retaining the existing NKD management team and maintaining capital discipline will also be important, along with avoiding further material capital allocation to the business.

Following the deal’s announcement, some shareholders were concerned that NKD may need significant cash injections following the acquisition, which Blair dismissed in his presentation.

“There were also comments in December, and I’m just sharing anecdotes I heard with you, that this business is going to need another cash injection soon. This is absolute nonsense,” he said.

“This business is highly cash generative. It can fund capital expenditure of €25 million (R487.45 million) per annum, and it’s got free cash flow thereafter of about €40 million (R779.92 million) per annum.”

“Certainly, in terms of its own and current growth projections, it can fund those easily out of what it has at its disposal and more. So, very comfortable with the cash generation there.”

Based on Mr Price’s share price performance following the presentation, these reassurances did not appear to hit the mark for some shareholders.

Between 17 March, the day of the presentation, and 1 April, Mr Price’s share price is down around 4.5%.

Cheesman said the weakness in Mr Price’s share price in the year to date reflects a combination of broader market weakness and investor reaction to the capital markets day.

“The market has already written off the acquisition, with the share price decline being larger than the deal value,” he said. 

“From this level, much of the risk appears to be priced in, potentially offering upside if execution is successful.”

“That said, management’s indication that it may pursue an additional offshore expansion opportunity in time is likely to remain an area of concern for investors.”

It should be noted that some shareholders have shown support for Mr Price since the deal was announced. 

For example, Allan Gray acquired a significant stake in the retailer on 22 January 2026, with the asset manager now owning 10.13% of Mr Price’s total issued ordinary shares.

Daily Investor reached out to Mr Price for comment, and a spokesperson referred us to its latest SENS update regarding the NKD acquisition, released on 23 February 2026.

In this update, the retailer informed shareholders that all the conditions relevant to its acquisition had been fulfilled, leaving only the payment to be completed. The transaction was completed on 31 March 2026.

Mr Price also referred Daily Investor to its investor presentation held on 17 March. The retailer added that it is difficult to comment on market prices, “specifically considering the global dynamics and ‘happenings’ underway at the moment”.

It referred to an article recently published by Business Day, which said the JSE shed more than R3 trillion in March due to the Middle East war’s impact on market sentiment.