Pick n Pay’s current market value has dipped so low that its entire stake in Boxer — now a separately listed and thriving business — is worth more than the parent company itself.

This unusual dynamic has sparked debate among investors: is it smarter to invest in Boxer directly or take a chance on Pick n Pay’s potential rebound?

The debate centers around CEO Sean Summers, who returned to lead Pick n Pay in September 2023 amid financial turmoil. The company was heavily indebted and struggling to turn a profit. To address this, Summers rolled out a two-pronged strategy: a R4 billion rights issue to reduce short-term debt, followed by the JSE listing of Boxer to tackle longer-term liabilities.

The Boxer IPO, which sold off 34.4% of the business for R8.5 billion, valued Boxer at R24.7 billion — a figure that rose to R28.8 billion shortly after trading began. This allowed analysts to isolate the remaining value of Pick n Pay Stores, which, shockingly, had sunk into negative territory prior to the IPO.

By April 2024, Pick n Pay Stores’ implied value had plunged to -R12.2 billion, indicating that investors saw it as worse than worthless. The situation improved slightly with the capital injection and Boxer listing, pushing the figure to a modest R3.5 billion. However, as of now, that value has slipped back into the red at -R1.5 billion.

Boxer, in contrast, is thriving — posting a 13.2% revenue jump to R42.7 billion and a R2.3 billion operating profit for the 2025 financial year. Meanwhile, Pick n Pay Stores grew turnover by just 2% and reported a R549 million operating loss.

Despite the challenges, some market players remain optimistic. Umthombo Wealth’s Nomtha Ngumbela sees Summers as a capable leader with the experience to turn things around. Rowan Williams from Nitrogen Fund Managers agrees, arguing that Pick n Pay offers exposure to Boxer and a potential turnaround story.

On the flip side, skeptics like Cobus Potgieter of SouthernCross Capital prefer a direct investment in Boxer, warning that Pick n Pay may continue to offload its Boxer stake to stay afloat. PSG’s Ricus Reeders is equally cautious, suggesting the company’s fundamentals don’t support a recovery thesis — at least not yet.

Ultimately, the choice for investors is clear: bet on a Boxer-driven comeback for Pick n Pay, or go straight for the stronger horse.

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