SOUTH AFRICA - MASSMART MAKES DECISION TO CLOSE ALL NON-PERFORMING STORES AMID SOUTH AFRICAN ECONOMIC WOES

South African retailer Massmart said on Thursday it had decided to close all of its non-performing stores, as cash-strapped consumers battle with high unemployment, modest wage increases and higher average fuel and utility prices.

Massmart, majority-owned by Walmart, said management will close trading at 23 Dion Wired Stores on March 19 and will decide whether to cease trading at 11 Masscash stores.

The company said it would continue talks with labour unions on measures to mitigate job losses and look at moving affected workers into vacant roles in other stores “where practical and reasonable”.

In the year ended Dec. 31, Massmart’s mass discounters division, which comprises hi-tech retailer Dion Wired and general merchandise and food retailer Game, fell to an annual trading loss of 674.6 million rand from a profit of 32.6 million rand hurt by lower consumer spending on electronics.

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.

via - IOL