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Mr Price shares gained as Chief Executive Officer Mark Blair defended the South African clothing chain\u2019s purchase of the retail business of NKD Group, after mounting concerns it may have overpaid in its push into central and eastern Europe.<\/p>\n
Mr Price opted for NKD to gain a scaled platform for earnings diversification, avoiding smaller deals with less impact, Blair said at the firm\u2019s capital-markets day in Cape Town on Tuesday. The company is making \u201cvoluntary disclosures\u201d in an effort to be transparent with investors who have recently \u201coverplayed\u201d speculation around the deal, he said.<\/p>\n
Europe\u2019s retail market is roughly 17 times larger than South Africa\u2019s, underscoring the scale of the opportunity, despite competition, Blair said. The \u201chighly capable management team in Germany is focusing on Germany,\u201d and will operate largely independently, he said.<\/p>\n
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The stock climbed 2.3% as of 11:26 a.m. in Johannesburg, paring its drop since December 10 \u2014 when the mid-range apparel, sports goods and homeware company said it will spend as much as \u20ac487 million ($560 million) for NKD \u2014 to 18%. It\u2019s still the worst performer on the broader retail index over that period.<\/p>\n
Read:\u00a0Shareholder asks JSE to intervene in Mr Price\u2019s NKD acquisition<\/p>\n
Sluggish growth at home has pushed South African retailers to seek new avenues for expansion, including moving into banking. Eastern Europe has drawn South African clothing chains before. While larger rival Pepkor Holdings successfully expanded in Poland through what became Pepco Group NV, others have been far less successful with offshore ventures.<\/p>\n
Read:\u00a0Mr Price hits 52-week low as NKD questions linger<\/p>\n
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\u201cI\u2019ll be looking to see whether leaving NKD to the existing management is good enough,\u201d Alec Abraham, an analyst at Sasfin Securities, said before the presentation. \u201cConsidering it\u2019s now about 30% of Mr Price\u2019s business, it\u2019s vitally important that it works. If you don\u2019t believe the numbers are achievable, it erodes confidence in management.\u201d<\/p>\n
Blair and his team started addressing questions during the ongoing presentation.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n