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Pick ‘n Pay, one of South Africa’s leading supermarket chains, owned and controlled by the billionaire Ackerman family, has taken legal steps to liquidate one of its major franchises, the Baladakis stores. The legal action follows the dismissal of Baladakis stores’ appeal regarding a contract termination by Pick ‘n Pay.
Last week, Pick ‘n Pay filed an urgent application with the Johannesburg High Court, aiming to take control of the deeply indebted Baladakis stores, which owe the retail giant nearly R200 million ($10.65 million). This marks the first instance in Pick ‘n Pay’s history where it has sought to liquidate a franchise business.
CEO Sean Summers expresses disappointment and legal necessity
Pick ‘n Pay CEO Sean Summers expressed disappointment over the situation, citing a protracted period of attempts to avoid such drastic measures. Summers emphasized the legal necessity, asserting Pick ‘n Pay’s commitment to prioritizing profitable and sustainable franchisees. He anticipates the upcoming hearing in the Johannesburg High Court around March 12.
John Baladakis, head of the Baladakis Group and a Pick ‘n Pay franchisee for three decades, contests the legal action. He claims that the implementation of a bulk discounting model by Pick ‘n Pay six years ago led to their current financial struggles. Baladakis vows to appeal the judgment, continuing the fight against the liquidation.
Operating 10 supermarkets and nine liquor stores on the East Rand with an annual turnover exceeding R1.5 billion ($80.3 million), Baladakis has been a fixture in the Pick ‘n Pay network. A former head of the Franchise Association of SA, Baladakis remains determined to contest the legal proceedings.
Established in 1967, Pick ‘n Pay holds a top position in South Africa’s retail sector, ranking as the second-largest retailer in the nation. The Ackerman family, known for their wealth and diverse holdings, owns a substantial 25.53-percent stake in Pick ‘n Pay, equivalent to 124,677,238 shares.
As the legal battle unfolds, the retail industry watches closely to see the implications and outcomes of Pick ‘n Pay’s unprecedented move to liquidate a major franchisee in its extensive network.
