Pick n Pay wants R4.7 billion more for its turnaround strategy

Pick n Pay announced that it plans to raise R4.7 billion by selling a 11.5% stake in its subsidiary, Boxer, through an accelerated bookbuild process.

The primary objective of this move is to fund Pick n Pay’s turnaround plan, intended to return the core supermarket segment to profitability and cash flow break-even.

The retailer said that it had made significant progress on multiple aspects of its turnaround plan over the last two years.

“The product offering has been enhanced, execution of in-store retail principles has been improved, and the quality of the store estate has been upgraded,” he said.

Pick n Pay added that a new logistics agreement is set to deliver efficiencies over the coming years.

“These factors have driven improved like-for-like sales growth in Pick n Pay company-owned supermarkets,” it said.

Alongside improved gross margins, the retailer is confident that these interventions will deliver further benefits.

Pick n Pay is also engaged in ongoing consultations with its labour partners to improve store operating efficiencies and costs.

Pick n Pay will deploy the R4.7 billion it gets from selling part of its Boxer stake to support the ongoing implementation of its turnaround plan and growth strategy.

It added that the money will also help Pick n Pay to achieve the maximum financial flexibility over the medium term.

“This will enable the Group to continue executing on its strategic priorities, investing ahead of the plan,” it said.

It added that there was a clear pathway to returning the core Pick n Pay Stores segment to cashflow break-even.