Meeting with SA’s one-time retail king Sean Summers in his London base got me questioning a cherished business belief.
I’ve long been a protagonist of the natural benefits which flow from family-controlled businesses. But after reflecting on what happened to Pick n Pay since Summers departed, sparked reassessment.
Sometimes businesses get too big for family ownership. An obsession to retain control can then affect its growth potential. When Summers stepped down as Pick n Pay’s CEO in 2008, the company was comfortably the most valuable of South Africa’s retailers with a market value of R25bn compared with Shoprite’s R18bn and Mr Price at R10bn.
Seven years later, Shoprite’s R93bn market cap dwarves the R33bn of Pick n Pay, and, indeed even Mr Price (R50bn). It was well documented that when he was CEO, Summers and the controlling Ackermans had divergent views on the family retaining control. When patriarch Raymond Ackerman mulls things over, he will surely be counting the cost – in billions.