Mr Price Group has announced a significant step in its international growth strategy with the proposed acquisition of European value retailer NKD Group GmbH, valued at approximately R9.66 billion. The deal marks the South African retailer’s most significant offshore expansion to date and positions the group firmly within the fast-growing European value retail market.

The group has agreed to acquire 100% of the shares in Pegasus Group Holding GmbH, which trades under the NKD Group retail brand. NKD is a well-established European value apparel and homeware retailer with a 60-year operating history and its head office in Germany.

NKD operates more than 2,100 stores across seven European markets – Germany, Austria, Italy, Croatia, Slovenia, the Czech Republic and Poland – and employs approximately 10,000 people. For the financial year ended 31 December 2024, the business generated net sales of €684.57 million, underlining its scale and relevance in the European value segment.

According to Mr Price, NKD’s business model is strongly aligned with the group’s core value, retail DNA. “NKD has a clearly differentiated value positioning, targeting quality and price-conscious customers, with a predominantly private-label range offering that serves the whole family and carries minimal fashion risk,” the group said in a statement.

Operational efficiency is a defining feature of the NKD model. The retailer operates smaller-format stores, averaging around 300 m², enabling it to achieve sustainable profitability while maintaining flexibility in store rollout. Its focus on smaller towns and secondary locations contributes to lower rental costs, while a lean approach to capital expenditure, labour and logistics supports margin resilience.

Mr Price added that NKD’s supply chain capabilities have driven ongoing gross margin expansion, while its use of technology enables disciplined, profit-accretive decision-making. The group also highlighted NKD’s management team’s depth and experience, noting strong cultural alignment and a proven track record in value retailing.

Importantly, NKD has identified significant growth opportunities within its existing seven markets and has the appetite to pursue long-term, sustainable expansion across Europe. This growth potential was a key attraction for Mr Price, which has been actively researching offshore opportunities while continuing to expand aggressively in South Africa since 2021.

Global research indicates that value retailing continues to outperform the broader retail market. In Europe, value retail accounts for approximately 22% of total retail spend, reflecting sustained consumer demand for affordable, quality offerings – particularly in a high-inflation, cost-conscious environment.
Should the transaction be concluded, Mr Price’s annual revenue would increase to approximately R53 billion, with the group’s store base growing to more than 5,000 locations and total employees exceeding 40,000.

Commenting on the acquisition, Mr Price CEO Mark Blair said extensive due diligence had preceded the decision. “We have spent a considerable amount of time researching markets and assessing opportunities. After meeting the NKD team, it was evident that this was the right business to pursue,” Blair said. “Like us, they are value retailers at heart and have an obvious understanding of who their customer is and how to serve them best.”

He added that NKD’s ambition and performance-driven culture made it a natural fit within the Mr Price Group.

Deal structure and financials
NKD is currently 100% owned by Pegasus, a German limited liability company. Pegasus will be acquired from UK-based Fliegendes Pferd by Mr Price, together with the shareholder loan receivables extended to NKD.

The consideration payable for Pegasus amounts to €415.00 million (approximately R8.23 billion), based on a locked-box date of 30 June 2025 and subject to escalation until the transaction’s effective date. NKD’s enterprise value, after adjusting for debt, cash and working capital, is €500 million (around R9.92 billion).

An additional €38.50 million (approximately R763.87 million) will be paid for the shareholder loan receivables, bringing the maximum aggregate transaction value to €487.00 million, or approximately R9.66 billion. The purchase consideration will be settled in cash, funded through a combination of existing cash resources and debt facilities.

The transaction is expected to close during Q2 of calendar year 2026, subject to regulatory approvals.

For the six months ended 30 June 2025, NKD reported net sales of €344.00 million and a profit after tax of €6.49 million, excluding debt and hedging derivative valuation charges. The net asset value to be acquired as at 30 June 2025 amounts to €91.14 million.