Massmart Holdings Ltd. started consulting with unions about store closures and jobs cuts, as the South African unit of Walmart Inc. battles to recover from an earnings slump.<\/p>\n
The plan is to shutter the 23-store Dion-Wired chain of hi-tech appliance shops and 11 Masscash wholesale outlets, a spokesman said by phone on Monday.<\/p>\n
Employees and the South African Commercial, Catering and Allied Workers Union have been informed and the process may take at least two months, he said.<\/p>\n
About 1,440 employees could be affected, the Johannesburg-based company said in a statement. The shares climbed 2.4% to R50 as of 11:22 a.m. in the South African city.<\/p>\n
The move marks the first significant act by Massmart\u2019s new chief executive officer, Mitchell Slape, who arrived from Wal-Mart in September with a brief to turn around the retailer.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Massmart has a total of almost 450 stores across 13 countries in sub-Saharan Africa and about 48,500 full-time employees.<\/p>\n