Mr Price is to acquire the retail business of NKD Group, a Germany-headquartered cash-based value apparel and homeware retailer operating in Central and Eastern Europe, for about R9.6bn. This comes as the company recently announced an ambitious growth strategy and stepped up research into new international markets even as it pushes ahead with one of the most aggressive store expansion drives in the fashion retail sector. The company has entered into an agreement through an indirect wholly owned German subsidiary to acquire 100% of the shares of Pegasus Group Holding, which trades as the retail business of NKD Group, and NKD’s shareholder loan receivables.
The consideration of a maximum of €487m (R9.6bn) will be settled in cash and will be funded through a combination of existing cash resources and debt facilities, Mr Price said in a statement on Wednesday. The senior management team of NKD will continue to run the business. NKD has a 60-year history of operating as a cash-based European value apparel and homeware retailer headquartered in Germany.
It operates 2,108 stores across seven Central and Eastern European countries — Germany, Austria, Italy, Croatia, Slovenia, Czech Republic and Poland. “NKD represents an opportunity that is strategically aligned with the Mr Price Group. It is a high-performing, value-focused business with a strong track record, has a skilled and committed management team who know the local market intimately, and has ample runway for further expansion in existing markets,” the group said.
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NKD executes an omni-channel strategy predominantly through physical stores and generated net sales of €684.57m for the 2024 financial year. Mr Price said that since the launch of the group’s new strategy in May 2021, guided by a new vision of becoming the most valuable retailer in Africa, it has made significant progress in executing its strategic growth plan. As part of the plan, it set about identifying opportunities that would drive the group’s future growth endeavours.
It said market data indicates that the growth in the value retail market is outpacing that of the global total retail market, which aligns with the group’s value-focused operating model. In Europe, value retailing is growing at a significantly higher rate than the total market and now accounts for around 22% of the total retail market, it said. NKD presents the group with a platform for future growth due to the depth and skill of the management teams in both markets.
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