James Wellwood “Whitey” Basson is a name synonymous with the extraordinary growth of Shoprite, Africa’s largest food retailer. Starting from humble beginnings, Basson transformed an eight-store chain into a retail empire with over 2,300 stores across 15 African countries. His strategic acumen, focus on affordability, and aggressive acquisition strategy made Shoprite a household name, overshadowing competitors like Pick n Pay.
Basson’s tenure at Shoprite not only redefined the retail landscape but also significantly contributed to his personal wealth, with the Whitey Basson net worth reaching billionaire status, reflecting his monumental impact on the continent’s retail sector.
Background
Whitey never planned to become a retail entrepreneur, he actually considered medicine before opting to study accountancy.
His friendship with Christo Wiese changed his destiny forever. He met Christo in 1964 while they were both studying at the University of Stellenbosch, and staying at Wilgenhof residence. They had a common bond, and were both staunch supporters of the United Party.
After completing their qualifications, the two friends went their separate ways. Christo became the right-hand man to Pep Stores founder, Renier van Rooyen in 1967. Whitey went on to serve his CA articles with Ernst & Young.
He left Ernst & Young after writing his final CA exam.
He then joined Bellville accounting firm Brink, Roos & Du Toit in 1970, where Pep Stores was one of the clients they worked with. The company was looking to list on JSE, and needed a financial manager to help them with the process, so Whitey joined them, and the company listed in 1972.
During that time, Christo had gone to seek a fortune in diamond mining. Whitey then became Renier’s personal assistant. In 1974, he got promoted to the position of Pep operational director.
Shoprite
With Van Rooyen’s will to back his entrepreneurial dreams, Whitey started looking into the potential of food retailing.
He received a call from a friend who told him a small food chain called Shoprite was up for sale. In November 1979, Pep went on to acquire 8 Shoprite stores from the Rogut family for R1 million.
In the early 1980s, Christo bought out Van Rooyen stake in Pep, and Whitey was left to run Shoprite interests. Gaining traction in a food retail market dominated by Pick N Pay was his main objective.
Growth
When he started out, he couldn’t get a foot into shopping centres and had to compromise with crummy little shops on the other side of the street from Pick n Pay – Raymond Ackerman was unstoppable at this point.
Despite the challenges that laid ahead, Whitey still pressed forward. Shoprite was restructured, which mainly involved the closure of some stores and opening of new ones. By 1983, Shoprite’s turnover had grown to R40 million, and its store numbers to 21.
From the get-go, Whitey was given a mandate to expand Shoprite as quickly as possible but there were stumbling blocks, with the major challenge being the inability to secure new stores openings in malls. The retail chain was still too small to be considered for tenancy by the major shopping malls.
In 1986, Shoprite was unbundled from Pep and listed on JSE as a standalone company, with a debut market capitalisation of R29 million. The only thing Shoprite lacked at the time of listing was traction to catch up with Ackerman’s Pick N Pay, which had a 12 year head start……
“I knew I was not going to get scale only through organic growth, big acquisitions were the only way.”
Whitey on plans to catch up with Pick N Pay
Acquisitions
Ackerman Food Stores
Basson’s first acquisition was six old Ackermans food stores in 1984, then controlled by the Edgars Group.
Grand Bazaars
During the late 1980s, 27 stores from the Grand Bazaars Group came up for sale, and a deal with Shoprite was almost concluded but unfortunately, the opportunity was lost in the closing stages when it was sold to Whitney’s old friend, Carlos dos Santos.
In 1990, Whitey approached Carlos and bought the 27 Grand Bazaars for R43 million.
Checkers
In 1991, Whitey took a big jump with the acquisition of the ailing Checkers for R55 million, then controlled by Sanlam. The deal gave Shoprite a national footprint and a presence in major shopping centres, and grew its size to 241 stores alongside a staff of 20 000.
But turning Checkers around was no easy task, at the time of the acquisition, Checkers was on its 5th CEO in 8 years. The 169 Checkers stores were bleeding money that equalled the turnover of Shoprite.
Within 9 months, Checkers was returned to profitability. According to Basson, it was the biggest risk he ever took.
At the time of the deal, they lacked the financial muscle to market Shoprite and Checkers as 2 separate brands. So they were forced to market them under as a combined brand, Shoprite-Checkers.
Sentra
In 1995, Shoprite took a major step forward when it acquired Sentra, a central buying organisation’s. The deal boosted Shoprite’s capabilities in centralized distribution, as Sentra served about 550 owner-manager supermarkets, marking Shoprite’s entry into franchising.
With this deal, Whitey was allowed to open stores in smaller markets where convenience shopping was the key to winning over consumers.
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OK Bazaars
In 1997, Whitey gained legendary status after he pulled theee most famous takeover deal in corporate SA – acquiring the iconic retailer OK Bazaars for a mere R1.
OK Bazaars was then controlled by SAB, at the time of the deal, the retailer was losing money every single day. Annually, OK’s losses exceeded Shoprite’s net profit in the year. This led to many pundits believing the R1 price tag was too expensive for a business that was impossible to turn around.
For SAB to sell for R1 was an act of desperation. SAB tried reviving the retailer multiple times and at some point, delisted OK in 1994 and pumped R1 billion into it but still couldn’t control the losses.
Whitey and his team diagnosed OK’s ailments and made swift work on the brand’s turnaround. After 2 years of taking control, OK was returned to profitability once again, with pre-tax earnings of R5 million.
The OK deal gave Shoprite the real scale Whitey had always wanted to surpass Pick N Pay – adding 18 hypermarkets, 125 OK Furniture, 139 OK supermarkets, and 21 House & Home stores.
Expansion Into Africa
Once home domination was established, and democracy dawned upon South Africa, Whitey paid attention to pushing Shoprite into African markets.
Shoprite’s first cross-border thrust was in Zambia, where a store was opened in 1995. Today, the African retail giant has a thriving and profitable presence across numerous African countries.
Shoprite Usave was launched in 2003 to serve the LSM 1-7 segment. Usave was designed with a cost structure that supported a 50% reduction in gross margin and still produce excellent returns on investment.
In 2005, Shoprite made its first move in to the bottle store business with the Shoprite Liquor Shop, as well as swallowing Foodworld and Computicket.
In early 2011, Shoprite acquired Metcash Trading Africa’s franchise division, which boasted brands like Seven Eleven, Friendly, and Price Club Discount Supermarket.
Whitey Basson Net Worth
Upon exiting Shoprite in 2016, Whitey Basson was paid handsomely, with his severance package including share options that amounted to roughly R1.75 billion.
This substantial wealth is attributed to his long tenure at Shoprite, where he not only held significant shares but also benefited from performance bonuses and the company’s soaring market capitalization under his stewardship. Whitey Basson net worth not only signifies his personal success but also reflects the monumental impact he had on the retail sector in Africa.
Retirement
On the 31st of October 2016, then aged 70, Whitey Basson announced his retirement from Shoprite during the company’s general meeting.
In Closing…
Whitey Basson’s journey with Shoprite is a testament to his vision, resilience, and unparalleled business acumen. His leadership has not only reshaped the retail landscape across Africa but has also amassed a considerable fortune, with the Whitey Basson net worth standing as a beacon of success in the business world.
Basson’s legacy continues to inspire entrepreneurs and business leaders, proving that with dedication and strategic foresight, one can transform an industry and leave an indelible mark on the economy.
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