After 37 years as CEO of Shoprite [JSE:SHP], Whitey Basson is ready to hang up his retailer boots and allow his successor to rise to the challenge.
Basson, who turns 71 in January, will step down at the end of December and be succeeded by Pieter Engelbrecht, the company’s 47-year-old chief operations officer, Shoprite said in a statement on Monday. Engelbrecht, who has been with the company for more than two decades, will take over as CEO from January 1.
“I am tired – the business is now so large and there are so many issues that take up too much time,” Basson told reporters at the company’s annual shareholder meeting in Cape Town. “Pieter is a very driven guy. I’d say about 50% of the operating issues he’s already taken over. So it’s not a new job for him.”
Basson has led Shoprite since forming the company in 1979. He expanded the retailer from an eight-store chain to Africa’s industry leader with a market value of R115bn and more than 140 000 workers. To build on that, Engelbrecht will need to overcome weak domestic consumer confidence and is likely to take the company beyond Africa.
“Whitey has turned 70, so I think it was imminent,” Evan Walker, a money manager at 36One Asset Management, said by phone from Johannesburg. The incoming CEO “has been very instrumental in a lot of aspects of growth in that business, so I think he is a very highly regarded successor.”
Shoprite shares rose 4.2% to a two-month high in Johannesburg after the company also said sales gained 16% in the three months through September. Revenue at the South African stores increased 12% as promotions helped offset the impact on customers of high unemployment and inflation.
Basson began his career by working as an accountant in the early 1970s, then entered the retail industry as a financial manager of the Pep Stores chain. He formed Shoprite by acquiring a small Western Cape grocery business and began building the company through store openings and acquisitions.
Inspired by low-cost European discounters such as Aldi, Basson focused on the middle-to-lower income market, the biggest in South Africa, while acquiring and reviving larger, unprofitable supermarket chains such as Checkers and OK Bazaars. Shoprite opened its first store outside its home market in Zambia in 1995.
Basson said recently that the company will consider expanding outside Africa, following in the footsteps of fellow South African retailer Steinhoff, which has transferred its primary listing to Frankfurt and made bids for companies in France, the UK and the US. Shoprite has stores in 15 African countries. He will remain as a non-executive vice chairperson to ensure an orderly leadership transition, the company said.
“The company has become very large and is at a crossroads,” chairperson Christo Wiese, who is also South Africa’s richest man and Shoprite’s largest shareholder, told investors
The succession comes only a month after Shoprite said it doubled the CEO’s pay to R100.1m in its last fiscal year, thanks to a R50m bonus for beating a profit-growth target.
Almost 30% of votes at the AGM were cast against the remuneration policy, in line with the previous year, when the Public Investment Corporation was among those who didn’t support the CEO’s pay deal. The state-owned PIC is Shoprite’s biggest investor with a 9.8% stake, according to data compiled by Bloomberg.[Source: News24]