Massmart has announced that it will 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.
The group said it will close trading at 23 Dion Wired Stores on Thursday (19 March) and will decide whether to cease trading at 11 Masscash stores.
It added that 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.
At the start of January, Massmart said that it was in talks with unions about store closures and jobs cuts at Dion Wired and Masscash wholesale outlets – impacting around 1,440 employees.
While the group described these as ‘potential’ closures, it has said that the intention is to close the brand in the country.
The move marks the first significant act by Massmart’s new chief executive officer, Mitchell Slape, who arrived from Wal-Mart in September with a brief to turn around the retailer.
The company, which also owns the South African chains Game and Makro, slumped to a loss in the first half of last year as shoppers stayed away amid an economic downturn.
Massmart cut its full-year dividend by 40% last year and scrapped its interim dividend. The stock has more than halved in value over the past 12 months, the worst performer of the 13 stocks on the FTSE/JSE Africa General Retailers Index.
Massmart has a total of almost 450 stores across 13 countries in sub-Saharan Africa and about 48,500 full-time employees.