Politically connected empowerment’s usual suspects are missing out on a combined market capitalisation of more than R160 billion as they are shunned by top JSE-listed retailers, which have chosen to rather give stakes to their staff and support struggling black entrepreneurs.
A snapshot Business Report survey shows that since the broad-based black economic empowerment (BEE) codes were passed into law eight years ago, at least seven major retailers, most of them among the top 40 largest JSE-listed blue chip companies, have not had empowerment partners.
Shareholder activist Theo Botha inspired the survey.
The companies with no black partners include furniture chains Lewis Group and JD Group, clothing retailers Foschini and Truworths, supermarket groups Pick n Pay and Shoprite and personal care chain Clicks.
This could be because the retailing chains do not feel obliged to chase targets set by the Broad-based BEE Act as they do not rely on state contracts for their survival.
The retail sector, unlike other industries, does not have a transformation charter that would have set targets to be achieved by a particular date.
Suzanne Ackerman Berman, Pick n Pay’s transformation director, said it had always been Pick n Pay’s philosophy that its employees should be owners in the business and, to this end, the company instituted an employee share ownership scheme soon after its inception in 1970.
At the end of February, the Pick n Pay employee share trust held 3.4 million shares in the company. The company recently set up a transformation committee and appointed a senior manager to oversee its broad-base BEE strategies.
The retailer focuses mainly on the preferential procurement and enterprise development elements set out in the Broad-based BEE Act of 2003.
“We believe that empowerment strategies focus on areas where we are able to effect the most change. More than 33 percent of our franchise stores are exclusively black-owned, creating new business entrepreneurs, transferring skills and creating jobs,” she said.
via Top retailers avoid BEE partners – Business News