Pick n Pay revamp plan could turn the retailer around, analysts say

Pick n Pay's new CEO, Sean Summers, unveils a turnaround plan to restore the struggling South African retailer's market share. The strategy includes closing or converting over 100 loss-making stores, aiming for break-even by 2027, and saving around 850 million rand ($46.52 million). Analysts find the plan plausible despite risks. Additionally, the Ackerman family will reduce its voting rights, fostering more independent governance and increasing investor confidence..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Nqobile Dludla.Break-even targets and a new strategy for South Africa's core Pick n Pay supermarkets seem "plausible", analysts said on Tuesday, a day after the new CEO of the struggling retailer outlined his plan. .___STEADY_PAYWALL___.New CEO Sean Summers is tasked with reviving a business that has been losing market share to bigger rivals Shoprite and others for more than a decade..Under his new plan, over 100 loss-making Pick n Pay supermarket stores will be closed or converted to Pick n Pay franchise or Boxer stores, resulting in about 850 million rand ($46.52 million) of savings..He also expected the core loss-making Pick n Pay business to break-even in its 2027 financial year.."While always carrying execution risk and the risk of conditions changing or things not going exactly to plan, the corporate plan to turn around the business appears plausible," Sasfin Wealth senior equity analyst Alec Abraham said..Stephan Erasmus, investment analyst at Anchor Capital concurred, said these actions, combined with the projected rights issue and listing its discounter Boxer, "will position Pick n Pay for a more stable and profitable future.".The Ackerman family, which founded Pick n Pay and is its majority shareholder, also announced on Monday that it will relinquish control by decreasing its voting rights to slightly below 50% after the planned rights offer.."This change is expected to establish a more equitable and transparent governance framework, increasing investor confidence," Erasmus said..Casparus Treurnicht, portfolio manager at Gryphon Asset Management, said with the Ackerman family's lowering influence, Pick n Pay could operate as a more independently owned business.."I think it was inevitable for this to happen," Treurnicht said. "This also gives Sean (Summers) more flexibility in running the operation going forward. I think the Ackerman family was too influential in the past.".Treurnicht added that he wondered if Summers and the financiers "pushed for this more balanced shift of power.".Chairman Gareth Ackerman, who will step down next year, told investors that he recognised the need for composition change in the board and that "we need new blood and ideas." ($1 = 18.2717 rand) (Reporting by Nqobile Dludla; Editing by Josie Kao).Read also:.🔒 Pick n Pay's strategic overhaul: All the details of the retailer's revamp planPick n Pay embraces Bitcoin: Transforming transactions and financial freedomFFM podcast finale: Winners, Losers and Lessons. Truworths, Textainer stand up; Implats, Pick n Pay hold the floor..SOURCE: REUTERS

Pick n Pay revamp plan could turn the retailer around, analysts say

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