Europe’s biggest convenience store chain, Żabka, announces plan to list on Warsaw Stock Exchange

Poland’s Żabka Group, which runs Europe’s largest chain of convenience stores, has announced plans for an initial public offering (IPO) in what is expected to be one of the biggest-ever debuts on the Warsaw Stock Exchange (GPW).

The company has not yet disclosed the details of the offering nor its timeline. But according to Bloomberg, Żabka’s owners – US private equity firm CVC Capital Partners – hope to raise between $1 billion and $1.5 billion during the debut, which would value the company at up to $8 billion (30.6 billion zloty).

The investors behind Poland’s 7-Eleven styled convenience store chain Zabka are planning an IPO in Warsaw, which could value the company at as much as $8 billion https://t.co/bknZxhBSab via @markets

— Piotr Bujnicki (@pbujn) September 23, 2024

“An IPO will allow Żabka Group to further capture the significant market opportunity that we see ahead of us,” said the firm’s CEO, Tomasz Suchański, in a statement on Monday.

Żabka is already the dominant player in Poland’s grocery store market, with around 10,500 locations across the country run by some 8,600 franchisees. The firm has also recently sought to expand abroad, opening its first stores in Romania earlier this year.

“We are confident that becoming a public company will benefit all of our stakeholders, creating value for shareholders and opportunities for our people, while also supporting local communities and entrepreneurship by providing our franchisees with the tools and knowledge to run their own businesses,” added Suchański.

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The IPO will not see the issuing of new shares, and all of the funds raised will go to the current shareholders. CVC has made clear that it intends to remain invested in Żabka’s development

“We are proud to have partnered with Żabka Group in recent years, investing to capture the significant market opportunity that we see,” said Krzysztof Krawczyk, a partner at CVC and chairman of Żabka Group’s board.

“We look forward to remaining a supportive shareholder, and see an IPO as the natural next step as Żabka Group’s management continues to execute against its ambitious growth strategy.”

If the IPO manages to raise $1-1.5 billion (3.8-5.7 billion zloty), as Bloomberg suggests, that gives it a chance of placing among the five largest debuts ever seen on the GPW, notes financial news website Bankier.pl. The record is held by e-commerce giant Allegro, which raised 9.2 billion zloty when it listed in 2020.

Polish convenience store chain Żabka has opened an outlet in Romania, its first one abroad.

The firm, which is already the largest convenience store chain in Central and Eastern Europe, hopes to have 200 outlets in Romania by the end of this year https://t.co/2ylB7bXEh9

— Notes from Poland 🇵🇱 (@notesfrompoland) May 15, 2024

Żabka notes that, in the period 2021-2023, its average annual sales growth was over 25%. Its revenues reached 19.8 billion zloty last year, up from 16 billion zloty in 2022. In the first half of this year, revenue was up 21.5% and sales by 10.3%, reports business newspaper Parkiet.

Around 17 million people – almost half of Poland’s population – live within 500 metres of their nearest Żabka store, reports the Rzeczpospolita daily.

Alongside its rapid growth, Żabka has also faced some criticism in Poland for its treatment of franchisees and for exploiting a legal loophole allowing it to operate on Sundays despite a trading ban introduced by the Polish government.

Almost a third of Poland’s population now lives within 300 metres of a Żabka convenience store, over 7,200 of which dot the country@mariawilczek looks at the rapid rise of the chain – whose name means “little frog” – as well as the criticism it has faced https://t.co/Qb1aPFyONo

— Notes from Poland 🇵🇱 (@notesfrompoland) July 1, 2021

Main image credit: Żabka press materials