International retailer that quietly exited South Africa by selling its 90 stores for R1
The Botswanan international retailer Choppies quietly exited South Africa, which operated over 90 stores at its peak in South Africa.
The decision was part of a major turnaround plan after years of financial difficulties that threatened the group’s survival.
According to Choppies’ integrated annual reports, the company chose to leave South Africa to stop heavy losses and refocus on its profitable core operations.
Choppies began as a single general dealer, Wayside Supermarket, in Lobatse, Botswana. After opening a second store in 1993, it began an aggressive expansion strategy and consolidated its supermarkets under the Choppies brand in 2003.
Its first move outside Botswana came in 2008, with the opening of a store in Zeerust, South Africa’s North West province.
The retailer continued expanding across the continent, listing on the Botswana Stock Exchange in 2012 before completing a secondary listing on the Johannesburg Stock Exchange (JSE) in 2015 to help fund its growth.
At its peak, Choppies operated more than 240 stores across eight African countries, including Botswana, South Africa, Zambia, Zimbabwe, Kenya, Tanzania and Mozambique.
In South Africa alone, stock exchange circulars and Competition Commission documents showed it had built a network of 93 stores.
However, the group’s rapid expansion came to a halt in 2018 after accounting irregularities, missed financial reporting deadlines and the suspension of its shares from both stock exchanges.
The crisis left the company carrying substantial debt and forced management to embark on a sweeping restructuring programme.
As part of that strategy, Choppies decided to exit markets that were consistently losing money, which included South Africa.
According to Choppies, “Choppies Supermarkets SA (Pty) Limited were fully impaired in 2018 as the future financial performance of these subsidiaries had an estimated recoverable amount from the value in use that was lower than the carrying amount of the company’s investment.”
“The main reason for the Group’s negative equity situation was the losses incurred and closure costs of BWP1.7 billion for the discontinued operations in South Africa, Kenya, Tanzania, and Mozambique.”
Turnaround bears fruit for Choppies investors
The South African exit was formally completed during the 2020 financial year. “During the financial year 2020, Choppies Enterprises Limited Board decided to discontinue the operations of Kenya, Tanzania, Mozambique and South Africa,” Choppies said.
“In South Africa, the entire issued shares were sold on 22 April 2020 for each of its wholly owned subsidiaries.”
The buyer, Kind Investments Proprietary Limited, acquired the South African business for R1 and assumed its outstanding retail debts.
The token purchase price reflected the fact that the operations had effectively lost their commercial value, while allowing ownership and liabilities to be transferred without forcing the wider group into liquidation.
Following the transaction, many of the viable South African stores and properties were gradually sold to established local retailers, including Shoprite and OK Franchise operators.
Freed from the heavy losses generated in South Africa and other discontinued markets, the company concentrated its investment on Botswana while retaining selected operations in Namibia, Zambia and Zimbabwe.
According to its latest reports, continued profits from these core businesses, together with a BWP300 million rights issue completed in 2023, restored the group’s balance sheet.
It also eliminated its negative equity position and helped it achieve a clean audit opinion after years of qualified results.
The recovery also enabled Choppies to resume paying dividends for the first time since 2017, with distributions declared in both the 2024 and 2025 financial years as the retailer completed its turnaround.
Loading ...