The Massmart Group has announced a number of potential store closures and retrenchments at Dion Wired and Masscash stores as it cuts down on under-performing outlets.<\/p>\n
In a shareholder announcement on Monday (13 January), the group said that it recently conducted a store optimisation project that highlighted a number of under-performing stores in its portfolio.<\/p>\n
“Consequent to this project the Massmart Group seeks to advise shareholders that Massmart has commenced, a potential store closure consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995, as amended; with organised labour and other relevant stakeholders,” it said.<\/p>\n
“A total of 34 Dion Wired and Masscash stores and approximately 1,440 employees are potentially affected by this process.”<\/p>\n
Massmart currently employers approximately 12,000 employees across its group which includes brands such as Makro, Game, Builder’s Warehouse and others.<\/p>\n
DionWired sales have come under pressure as low consumer confidence has affected sales of high price-ticket electronic items.<\/p>\n
Declining customer traffic into major shopping malls where some larger Dion Wired stores are based, has also impacted sales.<\/p>\n
Massmart reported a R396.1 million loss for the 26-week period ended June 2019, for its massdiscounters division, which includes Game and Dion Wired.<\/p>\n
Following his appointment as Massmart chief executive officer in September 2019, Mitchell Slape laid out a shift in strategy at the group in a bid to turn the business around.<\/p>\n
This involved a two-prong strategy, specifically looking at ways for Massmart to get the best deals for customers from its suppliers, as well as a so-called ’50x rule’, which stipulates that “for every rand spent at the head office, Massmart stores have to generate R50 in sales to recover this cost.”<\/p>\n
Regarding the future of Massmart, Slape indicated that he and the group’s management team were working on a turnaround plan that would include revitalising customer value proposition.<\/p>\n