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Walmart Sends Veteran to Fix Struggling African Venture

Massmart Names Walmart Veteran Slape CEO Amid Retail Struggles

(Bloomberg) -- Walmart Inc. is sending a 24-year veteran of the global retail giant to arrest a slump in profit at its troubled South African business.

Mitchell Slape has been appointed chief executive officer of Massmart Holdings Ltd., adding Johannesburg to a Walmart career that’s already taken him to Japan, India and Mexico. His appointment to replace Guy Hayward comes as Massmart said earnings may drop as much as 50% in the first five months of the year, sending its shares to a 10-year low.

“It’s quite a surprise that Walmart sent someone over considering it hasn’t been too closely involved in Massmart’s strategy,” said Daniel Dias, a Johannesburg-based analyst for Arqaam Capital. “The earnings are a concern.”

Walmart bought a majority stake in Massmart in 2011 for 16.5 billion rand ($1.2 billion) to tap into rising African consumer spending, but things haven’t quite worked out that way. Massmart is contending with falling sales at some retail outlets amid a slowdown in the continent’s most-industrialized economy and stubbornly high unemployment.

Walmart Sends Veteran to Fix Struggling African Venture

Rising taxes, fuel costs and other bills have also dented South African consumer confidence. Current economic data and sentiment suggest that there’s no immediate signs of improvement, Massmart said in a statement on Thursday.

The bleak outlook adds South Africa to a list of troubled Walmart markets. The retailer has also reported hurdles in China, India and the U.K.

Slape, 51, will move to Johannesburg when he has been granted a work permit, Massmart said. The shares traded 12% lower at 68.42 rand, valuing the company at 14.9 billion rand.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Bowker, Marthe Fourcade

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