SOUTH AFRICA - HUGE LOSSES LEAD TO MASSMART SHEDDING OVER 1440 JOBS AND CLOSURE OF 34 STORES

Retail group Massmart said on Monday it had commenced a consultation process in terms of the Labour Relations Act which could see the closure of 34 stores and affect 1440 jobs.

"The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio," Massmart, whose parent company is US multinational retail corporation Walmart, said in a brief statement.

Massmart owns brands such as Game, Makro, Builder’s Warehouse, Cambridge Food, Dion-Wired, Jumbo and CBW. It said the ongoing process would affect Dion-Wired and Masscash outlets.

In July 2019 Massmart Holdings' share price declined by more than 17 percent on the JSE after the group said it expected to report a decline in earnings across all of its four divisions for the six months to end June, mainly impacted by losses in Massdiscounters.

It was reported that the group's losses were expected to widen to R395 million and R425 million compared to last year’s loss of R95m.

The loss in the division was expected to turn the group’s headline earnings of R204.1 million reported in 2018 to a loss of between R530 million and R550.4 million during the period.

Later in the year the group hit the brakes on paying dividends in the half-year to June as the group pushed into the red on spiralling costs and lower profits.

At the time Massmart said that its total expenses jumped 11.8 percent during the period, while comparable expenses increased 9.2 percent.

In 2019 it was reported that Massmart recorded a 52 percent fall in trading profit to R318.9 million, while African currency weakness resulted in foreign exchange losses of R157.1 million, compared with a R23.4 million gain last year.

via - IOL