Massmart Holdings Limited, a South African (SA) firm and second-largest distributor of consumer goods in Africa has announced plans to dispose of all general merchandise, a total of 14 Game stores across Nigeria, Ghana, Uganda, Kenya and Tanzania, as reported by Reuters.
This was disclosed by Mitch Slape, the chief executive officer of Massmart on Friday. For leaving Nigeria, it is no surprise as its currency volatility and weak consumer demand has made other SA retail stores like Shoprite and Mr Price to exit the country recently.
According to Slape, as part of its turnaround plan to stabilise the business, it will review its store portfolio outside of Southern Africa.
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“The performance and the complexity in running those businesses is something that frankly we needed to address. We’ve commenced a formal sales process, we’re currently in discussions with potential purchasers to take on those stores,” Slape told investors.
Slape also said the move will result in an annual profit before interest and tax improvement of R750 million ($50.2 million)
Through the disposal of non-core and underperforming assets and store closures, Massmart hopes to sharpen management’s focus and invest in high returning assets and online.
Game sales from the rest of the Africa stores fell by 18.6 percent in rand terms in the 26 weeks ended June, and by 5 percent in constant currencies, due to continued currency weaknesses, Massmart with presence in 12 African countries said.
Game reported a narrower trading loss of R347.3 million in the period.
