Sean Summers’ genius move which saved Pick n Pay

Pick n Pay chief executive Sean Summers bought Boxer in 2002, which proved to be one of the best business decisions in South Africa’s retail space.

Summers is a Pick n Pay stalwart who worked for the company from 1974 to 2007 before re-joining the company in 2023.

He became managing director of the retail giant in 1996 and chief executive in 1999, taking over from founder Raymond Ackerman.

The fact that Ackerman was willing to hand the reins of his company to Summers showed the trust that the Pick n Pay founder had in him.

This trust was well-deserved. During his first tenure as CEO from 1999 to 2007, Summers made Pick n Pay the clear grocery market leader in South Africa.

Pick n Pay even outperformed Shoprite, Africa’s largest retailer, which was under the leadership of the globally renowned Whitey Basson.

In addition to Pick n Pay’s exceptional performance, Summers also acquired Boxer when he was in charge of the retailer.

Boxer was a plucky retailer targeting working-class South Africans. At the time, it had 35 stores and annual sales of R800 million.

Summers saw great potential in Boxer, as there was strong growth in the demographic it was competing in. He was correct.

The company showed exceptional growth over the last two decades and boasted 500 stores across South Africa & Eswatini in October 2024.

These 500 stores included 308 Superstores, 162 Liquor Stores, and 30 Build Stores in the two countries.

Today, Boxer is the pre-eminent discount grocery retailer in South Africa, with an annual turnover of R37.4 billion and a trading profit of R2.1 billion.

Its ‘soft discounter’ value proposition in South Africa has helped it to secure an approximate 68% share of the discount grocery retail market.

Boxer also has an estimated market share of 4.2% of the formal grocery market, more than double that of its closest competitor.

While Pick n Pay has struggled over the last decade, Boxer has been the star performer in the retailer’s stable.

Boxer saving Pick n Pay

In 2023, the Ackerman family approached Summers for assistance after it became clear that Pick n Pay was in serious trouble and needed an urgent turnaround.

He agreed to take over as chief executive again and restore Pick n Pay to its former glory. However, this was easier said than done.

Pick n Pay became technically insolvent and needed a large capital injection to strengthen its balance sheet and provide enough working capital for a turnaround.

Pick n Pay announced its two-step recapitalisation plan to raise money and ensure the company is in a healthy financial position.

• Step one was a R4 billion rights offer, which returned Pick n Pay return to a positive equity position.

• Step two was listing Boxer to settle Pick n Pay’s outstanding debt and reinvest in the core Pick n Pay supermarket business.

The two-step recapitalisation plan was successfully executed in 2024, with Boxer listing on the JSE on Thursday, 28 November 2024.

The retailer’s initial public offering concluded on 22 November, and Pick n Pay raised R8.5 billion while retaining 65.5% of the discount retailer.

Summers said he felt an extraordinary sense of pride in what the Boxer business has grown to become.

“We saw the potential in Boxer over 22 years ago when we first bought the company, and I have no doubt it will grow as a formidable contender in the retail sector,” he said.

Interestingly, Summers’ brilliant decision two decades ago to buy Boxer during his first tenure as CEO helped him save Pick n Pay during his second tenure.

“It is extraordinary that it is Boxer to save the day for Pick n Pay and put the oxygen back into our lungs,” he said.