Pernod Ricard, the world’s second-largest wine and spirits seller and producer of popular drinks like Jameson, has bought 1.27 million shares in Jumia’s newly announced secondary sale. According to a recent regulatory filing, the global liquor seller’s stake in Jumia increased to 7.5% from 6.4%.
It is unclear at what price the global spirits seller bought the new shares, but Jumia stocks (JMIA) traded at $4.68 on August 6, the day Pernod Ricard made the purchase, according to an SEC filing by Jumia. At that price, Pernod Ricard would have paid $6 million.
Pernod Ricard is a long-time Jumia investor and once held an 8.2% stake. The retailer issued more shares between 2020 and 2021, diluting Ricard’s position to 6.4%.
Jumia did not immediately respond to requests for comments.
Pernod Ricard confirmed the investment but did not provide additional details.
The share purchase shows the liquor maker’s faith in the African e-commerce giant whose share price dipped after it missed revenue estimates in Q2 2024. There were also concerns about share dilution from secondary sales.
In July 2024, Jumia’s share price rose 252%, reaching a market capitalisation of $1.3 billion. Investors cited increased cash efficiency and a rejig of the business as the basis of their optimism.
In February 2023, the retailer laid off 900 employees and cut executive compensation. In December 2023, it shut down Jumia Food, a food delivery business that was burning cash. The company’s 2024 Q2 report shows its efforts are paying off, as losses narrowed to $19 million, half of its Q2 2023 loss.
Its 2024 financials also show that its number of orders has increased to 4.8 million despite cutting advertisement costs. Jumia credits SEO optimisation and customer relationship management for the 6% increase in users of the platform which currently has 2 million active users quarterly—a bankable metric for Pernod Ricard which distributes its drinks on Jumia directly and through third-party sellers who use the platform across Africa.
