A trading update for the first half of the year from Massmart on Friday spooked investors who had been banking on a stronger recovery. Game is at the centre of the problems.
E-commerce was one bright spot in an otherwise mostly grim set of results from Walmart-owned retail group Massmart for the 2020 financial year ended 27 December.
Massmart said on Thursday its first-half headline loss widened to R1.1-billion, as sales at its stores fell due to Covid-19 restrictions. E-commerce, on the other hand, blossomed through the lockdown.
Walmart-controlled retail group Massmart said on Tuesday that it will cut as many as 1 800 employees at its Game stores in South Africa.
Massmart-owned electronics retailer DionWired is gone. The troubled Walmart-owned retail group said on Thursday that all DionWired stores will cease trading at 6pm on 19 March.
Although yet to recover from Edcon’s woes and downsizing, South Africa’s shopping centre landlords are set to face even more intense rental negotiations with other major retailers.
Less than a month into 2020, South African companies have already announced thousands of job cuts. In a country where a third of the labour force is already unemployed, this will put even more strain on economic growth.
It comes as no surprise that the South African unit of Walmart, Massmart, is in talks with unions to shut down its DionWired and Masscash stores, analysts say.
Massmart plans to close the 23-store DionWired chain of hi-tech appliance shops as well as 11 Masscash wholesale outlets, a spokesman said by phone on Monday.
Retail group Massmart Group, whose assets include Makro, Game and DionWired, warned on Monday that it’s likely to close a range of stores affecting the jobs of nearly 1 500 employees.