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Ackerman family rejects calls to step back from retailer

The family behind one of South Africa’s highest profile retailers has rejected calls from analysts and fund managers to loosen its hold on the family business.
Gareth Ackerman's family has rejected calls to step back from retailer

The family behind one of South Africa’s highest profile retailers has rejected calls from analysts and fund managers to loosen its hold on the family business.

A spokeswoman for the Ackermans told CampdenFB that the family is committed to Pick n Pay and has no plans to step back from the business.

Her comments came after a number of analysts told Bloomberg that they were concerned about the business’s future.

Pick n Pay chief executive Nick Badminton announced he was leaving the retailer earlier this month, leading to concerns that his replacement could struggle to work with the family, headed by second-generation Gareth.

He succeeded his father, Raymond Ackerman, in 2010 and has since focused on restructuring the company, including selling off its divisions.

The spokeswoman said: “We are fully confident that our strategy will allow us to implement the changes underway in the business to win back profitable market share in South Africa.”

But speaking to Bloomberg, Theresa Heath, a retail analyst at Stanlib Asset Management, said: “There is a risk that a new CEO may say the turnaround needs to take a different path.”

Syd Vianello, an analyst at Johannesburg-based Nedbank Group securities unit, also said the company’s dividend policy isn’t working – in the year to February 2011, Pick n Pay paid out 75% of earnings in dividends, according to Bloomberg.

“Pick n Pay’s dividend policy has been unhealthy to the point where the company has struggled to fund normal growth,” Vianello told Bloomberg.

However, there are no plans to change the dividend structure currently. The spokeswoman added that the family “will remain invested in Pick n Pay” – which will help the business in the long term.

“We believe that family ownership has the advantage of letting a company have a much longer term view,” she said.

The business, founded by Raymond in 1967, is controlled by the family through its majority stake in Pick n Pay Holdings.

Pick n Pay’s turnover for the six months to the end of August was 27.1 billion South African rand (€2.47 billion), up from 25.2 billion South African rand the year before.  

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