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The Ackerman family, prominent figures in South Africa, have recently faced a substantial setback, witnessing a wealth reduction of nearly $50 million within the last 15 days. This decline is attributed to a sharp decrease in the shares of their flagship enterprise, Pick ‘n Pay.
In the past two weeks, the family’s combined stake in Pick ‘n Pay, which includes 25.53 percent or 124,677,238 shares, lost R906.4 million ($47.43 million) in market value. This drop follows market reactions to the group’s two-step recapitalization plan designed to improve operational stability in a challenging operating environment.
Pick ‘n Pay’s market capitalization falls below $515 million
Established in 1967, Pick ‘n Pay holds a significant position in Africa’s retail sector, boasting a network of over 2,000 stores across eight African countries. As the nation’s second-largest retailer, it trails behind Shoprite Holdings, a retail giant partially owned by South African billionaire Christo Wiese.
Facing tough market conditions, Pick ‘n Pay reveals a two-part strategy to strengthen its financial position. The plan involves a rights issue to generate up to R4 billion ($210 million) and the listing of its discount grocery chain, Boxer. These steps are designed to manage increasing debt, boost immediate cash flow, and address challenges like a slow consumer market, costs associated with load-shedding, and intensified competition.
Since February 16, Pick ‘n Pay shares have experienced a notable decrease of 26.76 percent, dropping from R27.17 ($1.4201) to R19.90 ($1.0401). This decline has resulted in the group’s market capitalization falling below the $515 million mark, leading to considerable losses for shareholders, particularly the Ackerman family.
Market volatility hits Ackerman family’s Pick ‘n Pay stake: A $47.43 million slide
The recent decline in Pick ‘n Pay shares has led to a reduction in the market value of the Ackerman family’s stake by R906.4 million ($47.43 million) over the last 15 days, decreasing from R3.39 billion ($177.28 million) on Feb. 16 to R2.48 billion ($129.84 million).
Despite this setback, the Ackerman family remains prominent among investors on the JSE. Their strategic and diversified investments solidify their position among the wealthiest individuals in South Africa. The ongoing economic challenges and market fluctuations underscore the resilience required to navigate the retail sector.
