South African retail giant Mr Price Group Limited has signed a purchase agreement to acquire NKD Group GmbH, a leading European value textile discounter, from private equity firm TDR Capital LLP. The transaction, which represents a strategic move to expand Mr Price’s footprint into Europe, remains subject to customary antitrust approvals.
NKD has experienced significant growth under TDR Capital over the past seven years, consolidating its position in the European market while investing in product quality, digital capabilities, and omnichannel retail strategies. The company operates across Germany, Austria, Italy, Slovenia, the Czech Republic, Croatia, and Poland, with over 10,000 employees and a broad range of textile products, homeware, and seasonal items.
Mr Price Group intends to leverage NKD’s strong store network and digital expertise to expand its presence in Europe. Medium-term plans aim for a network of 3,000 stores, with a long-term target of 4,000 locations, which would create additional employment opportunities. “NKD is a perfect fit for our growth strategy,” said Mark Blair, CEO of Mr Price Group. “We look forward to working with NKD’s talented team and jointly leading the NKD Group into its next phase of growth.”
NKD’s CEO, Alexander Schmökel, emphasized the benefits of the partnership: “With a clear vision and strong commitment, we can sustainably expand our market position in Europe. Together with our new owner, who understands our industry, we will consistently implement our growth plans.”
Despite the strategic rationale, the proposed acquisition has faced scrutiny from some shareholders. Benguela Global Fund Managers has raised concerns that the South African operations of Mr Price may subsidize NKD, which is reportedly a loss-making entity, potentially impacting the group’s overall return on equity. The fund has requested that the Johannesburg Stock Exchange classify the deal as a Category 1 transaction, which would give shareholders the opportunity to approve it.
Victor Seanie, Head of Research at Benguela, likened the transaction to a scenario in which management prioritizes personal incentives over shareholder returns, highlighting concerns about low initial profitability and high leverage associated with the acquisition. While the JSE has not yet supported Benguela’s classification request, the matter has been escalated for further consideration. (EWN)
TDR Capital expressed confidence in the acquisition, noting NKD’s growth and innovation during its ownership and calling Mr Price Group “the ideal long-term partner for sustainable development and expansion in Europe.”
The completion of the acquisition is expected to provide Mr Price Group with a strategic platform for further growth in Europe, complementing its existing 3,100-store network across Africa and its omnichannel business in apparel, homeware, sportswear, and other retail sectors.