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The Ackerman family, which founded South Africa’s Pick n Pay will relinquish control of the struggling retailer as part of a revamp aimed at stemming losses, cutting debt and regaining market share.
Gareth Ackerman will also retire as chairman after 14 years in the job and 40 years at the company, though he will stay on to support management until next year’s annual results.
New CEO Sean Summers is tasked with reviving a business that has been losing market share to bigger rival Shoprite, and others for more than a decade.
Founded by Raymond Ackerman in 1967, Pick n Pay was once South Africa’s largest retailer, but “inappropriate strategic initiatives” over the last decade failed to prevent profit declines in the core business, Gareth Ackerman said on Monday.
This led the group, whose crown jewel is discount grocery chain Boxer, to report a comparable loss before tax and capital items of 1,67 billion rand (US$91 million) in the year ended February 25, from a profit of 1,8 billion rand the year before.
Summers announced a two-step recapitalisation plan earlier this year that includes a rights issue to raise up to 4 billion rand and Boxer’s listing in order to cut the group’s 6,1 billion rand of debt and help fund its new strategy.
Ackerman Investment Holdings (AIH) supports the plan and will invest up to 1,025 billion rand in the rights offer.
But AIH and related persons have also agreed to forgo control of Pick n Pay, such that their voting rights will fall slightly below 50 percent after the planned offer, the company added.
AIH will also relinquish the right to nominate the chair, CEO and finance chief, and the Ackerman family’s representation on the board of directors will reduce to three members from four.
“We need new blood and ideas,” Gareth Ackerman said. — Reuters.
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