South African retail giant, Massmart has announced plans to join its competitor, Shoprite to sell assets in West Africa and East Africa, as it concludes to sell 14 stores in Nigeria, Ghana, Uganda, Kenya and Tanzania.
This was disclosed by its Chief Executive Officer, Mitch Slape on Friday, as reported by Reuters. Massmart revealed reasons including currency volatility regarding its Nigerian business and falling consumer demand.
“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 said in an investors meeting.
“But that is not enough. Achieving break-even performance isn’t going to be sufficient for us to be satisfied, we’ve got to really get Game back to a healthy level of profitability and performance,” he added.
This comes after the company, majority-owned by American retail giant, Walmart, reported a half-year loss.
Massmart says the move to withdraw from Nigerian and East African markets will result in an annual profit before interest and tax improvement of 750 million rand ($50.24 million).
What you should know
Recall Nairametrics reported in June that Shoprite’s operations in Nigeria was acquired by Ketron Investment Limited, a Nigerian company owned by a group of institutional investors led by Persianas Investment Limited after the approval from the Federal Competition and Consumer Protection Commission (FCCPC).
“We are thrilled to complete the acquisition of Shoprite, ensuring the continued operations of one of the biggest retail success stories in Nigeria. We look forward to building an even stronger company following our acquisition and are excited about the greater impact we will achieve to the benefit of our customers and other stakeholders now and well into the future,” Tayo Amusan, Chairman, Ketron Investment Limited, said.