Pick n Pay has announced its exit from the Nigerian market, selling its 51% stake in a joint venture. This decision, part of a restructuring strategy, follows financial challenges since its 2018 entry. The company plans to focus on its successful Boxer division and aims for a Johannesburg Stock Exchange listing.
In a significant shift, South African grocery retailer Pick n Pay has announced its exit from the Nigerian market by selling its 51% stake in a joint venture. This decision aligns with the company’s broader restructuring strategy aimed at enhancing financial performance outside South Africa, where it has encountered considerable challenges.
Since entering Nigeria in 2018 through a partnership with A.G. Leventis, Pick n Pay has operated only two stores, including its flagship location in Lagos's affluent Victoria Island. The company has faced mounting financial difficulties, leading to a substantial half-year loss attributed to trading challenges in its core supermarket operations and increasing borrowing costs.
Despite these setbacks, Pick n Pay has experienced some success in its clothing and online divisions, alongside improvements in its company-owned supermarkets. CEO Sean Summers expressed optimism about reducing trading losses in the Pick n Pay business by up to 50% for the current fiscal year.
In contrast, the company's discount division, Boxer, continues to flourish, reporting a 16% increase in trading profits. Looking ahead, Pick n Pay plans to list Boxer on the Johannesburg Stock Exchange, potentially raising 8 billion rand ($452 million) in what could become the largest offering on the continent this year. This exit underscores a growing trend of multinational companies retreating from Nigeria due to profitability challenges.
