Evan Walker of 36One unpacks the upcoming Boxer listing, detailing its strong growth trajectory, Pick n Pay’s decision to sell, and why Boxer’s straightforward, value-focused approach makes it a compelling investment in South Africa’s retail sector.
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In a recent BizNews interview, Alec Hogg spoke with Evan Walker from 36One Asset Management, who offered insights on Boxer, the discount retail giant soon to be spun off from Pick n Pay and listed on the Johannesburg Stock Exchange. With an extensive history and a uniquely South African business model, Boxer has gained attention as an attractive investment opportunity in the country’s retail sector, thanks to its proven appeal in the informal and rural markets. Walker highlighted Boxer’s growth potential, Pick n Pay’s rationale for selling, and the resilience that has made Boxer a must-watch for investors.
Boxer’s History and Business Model
Boxer’s roots date back to 1977, beginning as a relatively small player in KwaZulu-Natal and later becoming one of South Africa’s largest discount retailers after Pick n Pay’s acquisition in 2002. Walker emphasizes that this acquisition, driven by then-CEO Sean Summers, was a landmark decision that ultimately provided Pick n Pay with a “gem of an asset.” Unlike Pick n Pay’s traditional supermarkets, Boxer operates with a focused, no-frills model, appealing to price-sensitive consumers in rural areas. According to Walker, this streamlined approach has helped Boxer expand rapidly while maintaining profitability and offering a value-focused experience to South Africa’s low-income shoppers.
Boxer’s business model operates on a deep-discount philosophy. “They run a very simple retail philosophy,” Walker explains, describing Boxer’s efficiency in cost structure and operations. With about 30 to 40 grocery stores and 30 to 40 liquor stores added each year, Boxer continues to capture market share by sticking to its core focus: affordable prices and essential services. Operating in areas that are underrepresented in major metropolitan centers, Boxer has tapped into a high-demand market segment, becoming a leading retailer for consumers who prioritize value over luxury. “They offer bulk promotions and keep costs low by eliminating frills, making them highly competitive and efficient,” Walker notes.
Why Pick n Pay is Selling
Despite Boxer’s profitability, Pick n Pay has decided to part ways with the brand, primarily as a strategy to stabilize its balance sheet amid financial challenges. Walker points out that Pick n Pay entered 2024 with nearly R8 billion in debt and a supermarket division that continues to face operating losses. This financial strain has pushed Pick n Pay’s leadership to make bold moves, including raising R4 billion in a rights issue earlier in the year.
The sale of Boxer is expected to raise an additional R8 billion, providing Pick n Pay with fresh capital to tackle its own challenges. “This will give Pick n Pay a fresh start, a chance to bring their balance sheet back on track and focus on their core business,” Walker explains. He praises Summers’ efforts to stabilize Pick n Pay by closing underperforming stores and cutting losses, saying that the Boxer sale is a necessary step in giving Pick n Pay the resources it needs to revitalize its operations.
The Strength of Boxer’s Unique Market Approach
One of the most fascinating aspects of Boxer’s success, according to Walker, is how it has managed to thrive while other parts of Pick n Pay’s business have struggled. Hogg notes the paradox, asking Walker why Boxer was able to stay resilient and profitable while the main supermarket brand lagged behind. Walker attributes this resilience to Boxer’s focused, autonomous management, saying, “They didn’t meddle with the business; they let it grow on its own.”
Boxer’s unique appeal lies in its ability to serve the rural and informal markets with affordable, essential services. Walker describes it as a low-cost operation, stripped of the luxury features common in urban supermarkets, while still offering critical conveniences like banking services, money transfers, and even a loyalty program to drive customer engagement. These services are key for Boxer’s target market, which includes many customers from South Africa’s informal economy.
By staying true to its value-driven model, Boxer has carved out a competitive niche that has allowed it to grow in regions where other retailers struggle. “They’re at the forefront of offering all the technological angles of retail,” Walker explains, noting that customers can perform a range of financial transactions in-store, such as opening bank accounts in minutes and redeeming government grants. With a footprint in a segment that continues to grow, Boxer stands out as a dominant player in South Africa’s rural and informal retail market.
A Promising New Listing
Boxer is set to list on the JSE on November 28th, with substantial interest already driving a buzz in investment circles. According to Walker, institutional investors are eager to secure a stake, as South Africa has seen few new listings in recent years. He expects the listing to be oversubscribed and advises caution for investors considering a purchase at the outset. “There might be a frenzy on the day of listing, but it’s a stock worth holding long term,” Walker says, suggesting that investors wait for an opportunity after the initial surge.
For long-term investors, Walker believes Boxer represents a sound addition to any portfolio, given its solid foundation, expansion potential, and ability to generate consistent revenue from the low-income market. Despite its simple operating model, Boxer’s growth in areas like banking services, promotions, and loyalty programs shows a commitment to staying relevant and competitive. Walker is optimistic about Boxer’s future, predicting that the brand will continue to capture market share in underserved communities, where informal retailers still hold sway.
Looking Forward
Walker’s analysis paints Boxer as a rare opportunity for South African investors—a well-established brand with growth potential in a largely untapped market segment. Walker is confident that Boxer’s straightforward, high-value approach will allow it to grow in both reach and revenue in the years to come. Although the brand’s listing might attract a flood of initial interest, Walker advises patience, reminding investors that opportunities often come around more than once.
For Pick n Pay, the sale marks a bittersweet milestone, as the Boxer acquisition turned out to be one of its best moves. Yet, as Pick n Pay works to rebuild, Boxer’s spinoff presents an opportunity for investors to access a business that remains solidly profitable and deeply connected to the needs of South Africa’s rural and informal sector.
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