Walmart’s South Africa Retailer Scales Back to Fuel Recovery
(Bloomberg) -- Massmart Holdings Ltd. is selling three more units as the Walmart Inc.-owned South African retailer steps up efforts to turn around the company.
Barclays Plc has been appointed to dispose of food-seller Cambridge, cash-and-carry chain Rhino and Massfresh, which is made up of The Fruitspot and a meat-processing facility, Massmart said in a statement Monday. It has not yet had any talks with specific buyers, Chief Executive Officer Mitchell Slape told reporters by phone.
“This is all about sharpening our management focus,” Slape said. “It’s about allowing management to have the time, the energy, the attention, the capital so that we can invest properly.”
News on progress with the retailer’s reorganization came as the Johannesburg-based company reported a narrowed loss for the 52 weeks ending Dec. 27. Massmart has already cut 60% of the 600 million rand ($39 million) it’s targeted in savings this fiscal year. The shares jumped 21%, the most on record.
Walmart sent Slape from the U.S.-based parent company to turn around Massmart in 2019, though his task was swiftly made even tougher by the coronavirus pandemic and associated lockdown rules. Under his leadership, the company has cut jobs, shut its Dion Wired chain, disposed of underperforming Masscash stores and stopped selling fresh food in its household-goods chain Game.
The retailer has been yet another international headache for Walmart, which has also had difficulties in China, India and the U.K. and sold off assets in Brazil in 2018.
Massmart said it’s also considering exiting some African countries outside of its home market and immediate neighbors as part of the reorganization, though there may be some “that we decide to double down in and invest further,” Slape said.
“There is no question in my mind that there is upside potential for retail growth” in Africa, he said. Even in the “more immediate term, customer strength is beginning to return as we move out of Covid restrictions.”
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