NKD is a market-leading discount retailer with over 1,800 stores across Germany, Austria and Slovenia and with a significant and growing presence in Italy, Croatia and Eastern Europe. The store sells a mix of basic apparel and homeware products at competitive prices.

NKD has a unique market positioning operating typically from small format stores in provincial towns where there is limited direct competition. NKD stores often serve as a local community one-stop-shop with a strong customer connection. The company demonstrates very strong returns on capital and has considerable further roll-out potential in its core markets.


We have spent a significant amount of time analysing the retail market in the context of the well-documented struggles the sector has faced in recent years, believing that there may be certain niches within the sector which still offer fundamental value. We focused in on the discount retail subsegment of the market on the basis that it is relatively defensible, less susceptible to online disruption and offers operational and data-driven upsides. We felt that NKD Group in particular had a unique market positioning with a differentiated location strategy, relatively benign competitive dynamics and strong returns on capital.

Following an auction process in early 2018 which failed to lead to a sale of the business, we stayed close to the business, monitoring its performance and building our investment case. We were able to enter bilateral negotiations to acquire the company in early 2019 at a compelling valuation.

The acquisition was completed in May 2019.