South African retailer Pick n Pay (PIKJ.J) has announced its departure from Nigeria, selling its 51% stake in a joint venture as part of a broader strategy to refocus outside its home market, according to CEO Sean Summers.
Pick n Pay initially entered Nigeria less than five years ago through a partnership with AG Leventis (Nigeria) and currently operates two stores, including one in the upscale area of Victoria Island, Lagos.
This decision follows a trend of multinational companies withdrawing from Nigeria, Africa’s largest population center, due to profitability concerns.
The company reported a significant increase in half-year losses on Monday, attributing these to ongoing losses in its primary supermarket operations and rising borrowing costs.
For the 26-week period ending August 25, Pick n Pay, South Africa’s third-largest grocery retailer, recorded a pre-tax loss of 1.1 billion rand ($62 million), up from 837.2 million rand in the prior year.
Losses in its Pick n Pay division rose by 9.1% to 718.9 million rand, primarily driven by declining gross profit margins, the company said.
However, it also noted strong growth in its clothing and online segments and promising improvements in the performance of its company-owned stores.
CEO Sean Summers, who is overseeing the retailer’s turnaround efforts, shared that he is confident that trading losses in the Pick n Pay division could decrease by as much as 50% over the full year.
In contrast, the company’s discount Boxer division reported a 16% rise in trading profit to 801.4 million rand, boosted by a 12% increase in sales.
Pick n Pay plans to list the low-cost Boxer division on the Johannesburg Stock Exchange by year-end, aiming to raise up to 8 billion rand ($452 million) in what could be the continent’s largest offering this year.
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