JOHANNESBURG – South African retailer Mister Price may enter another international market following its expansion in Europe, but has no plans for a worldwide presence, its chairman said on Tuesday.
The clothing and homeware group, which is expected to close the purchase of German-based discount retailer NKD Group this month to expand in Central and Eastern Europe, outlined its overseas strategy during an investor presentation on the deal.
Chairman Nigel Payne told investors the board has narrowed its long-term offshore M&A focus to two regions after reviewing opportunities around the world.
“Priority number one is Central and Eastern Europe and that's a development platform on a 10 to 20 year basis. So it could expand, ten years or whatever, to become Southern Europe,” Payne said.
CEO Mark Blair said that “there is another area that we have identified that will be extremely attractive to us,” but he stressed that the company will only move forward if the conditions are right. He did not identify that area.
Both the chairman and CEO said the group was not running a global buying spree. He said Mr Price's dealmaking in South Africa is largely complete and he does not expect to make further transactions there in the immediate future.
The NKD deal paves the way for Mr Price to meet fast-growing value retail demand in Europe, where market data shows the discount segment is outpacing overall apparel sales.
By 2030, Blair said, the European business aims to generate 1 billion euros ($1.2 billion) in annual sales and deliver double-digit operating margins driven by opening more stores, expansion in Germany, Poland and Italy and tight cost controls.
In 2024 NKD reported net sales of EUR 712 million and earnings before interest and tax margin of 4%.
($1 = 0.8680 euros)