Mr Price goes from hero to zero

Mr Price went from one of the best-performing shares on the Johannesburg Stock Exchange (JSE) to one of the worst-performing shares.

Mr Price is a well-known retail brand in South Africa and operates 5,000 stores across Africa and Europe, focusing on clothing, footwear, accessories, and homeware.

Its retail chains include Mr Price, Mr Price Sport, Miladys, Mr Price Home, Sheet Street, Power Fashion, Yuppiechef, and branded discount business Studio 88.

The company experienced a strong share price performance between October 2023 and December 2024, but then experienced a collapse.

To understand the rise and fall of Mr Price, it is instructive to go back to October 2023, when the share price started to rise.

After promotional discounting in 2022 and early 2023, Mr Price improved stock control, which expanded its gross profit margins and reduced markdowns.

The end of load shedding was another tailwind, stabilising store trading hours and restoring lost sales volume experienced in previous years.

Middle- and lower-income consumers also benefited from the two-pot retirement system, which filtered down to Mr Price’s finances.

The share was on the move, and in January 2024, FNB’s Peet Serfontein and Jalpa Bhoolia said that Mr Price was a buy.

They said that the dip in the share price in 2022 and 2023 was mostly due to the business cycle and that it offered an attractive investment opportunity.

They explained that discretionary retail, where Mr Price operated, was supported despite economic pressure on consumers.

“Within this space, we think that businesses in the high fashion, value and discount segments of the market will continue to perform well,” they said.

They added that Mr Price was uniquely positioned and had no true competitor in South Africa, especially in fast fashion.

“Mr Price boasts a solid balance sheet and is cash rich with low debt levels, and has good prospects in new areas like baby and schoolwear,” they said.

Serfontein and Bhoolia’s Mr Price pick was solid. The share price increased by 100% over the next year.

Mr Price share price decline

Between October 2023 and December 2024, the Mr Price share price increased by 127%, driven by strong performance improvements.

However, over the last 18 months, the stock price declined by 45%, shaving R35 billion off the company’s market cap.

Mr Price missed its consensus targets in the 2026 financial year and faced increased competition from Chinese retailers Shein and Temu.

The company also faced a tough trading environment in South Africa due to weak economic growth and pressure on consumers.

There were compounding factors in the country, like logistics bottlenecks and infrastructure decay, that filtered down to Mr Price.

However, the biggest factor was the acquisition of German retailer NKD Group, announced in December 2025.

Several Mr Price shareholders have criticised the deal, and one even took the matter to the JSE and Financial Services Tribunal (FST). However, this case was dismissed.

These shareholders raised many concerns, including the high price it paid for NKD Group and the viability of a European expansion.

The Mr Price management shrugged off this criticism and concluded the deal. This was despite the fact that many local retailers lost billions in similar deals.

Investors were not impressed, and the Mr Price share price declined by 22% since the deal was announced.

Mr Price CEO Mark Blair tried to address investors’ concerns, painting a rosy picture of NKD Group’s prospects.

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).

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

Benguela Global Fund Managers’ head of research, Victor Seanie, said these targets were optimistic.

He pointed to fierce competition among European value retailers, NKD’s competitive disadvantages, and Europe’s low GDP growth.

Mr Price share price