Retail giant Massmart, which has Game, DionWired and Makro in its stable, announced Monday it’s consulting with employees about the potential closure of 34 stores.
Massmart, one of SA’s biggest retailers, is the second company to announce possible store closures in 2020, a move that could affect up to 1440 employees.
“The Massmart Group has recently conducted a store optimisation project that highlighted a number of underperforming stores in its portfolio. Consequent to this project the Massmart Group seeks to advise shareholders that Massmart has commenced, a potential store closure consultation process,” the group said in a statement.
This news comes shortly after SA’s largest clothing retailer, Edcon, announced the closure of its Edgars store in Rosebank Mall.
Massmart said it has already begun talks under section 189 of the Labour Relations Act, a process that companies undertake when they intend to retrench staff.
The announcement comes three months after Mitchell Slape took over as Massmart’s CEO with a brief to turn around the retailer.
The company, which has 23 DionWired stores in the SA region, already closed two outlets in the first half of 2019.
The retailer said at the time that DionWired sales had been affected by low consumer confidence, which caused a decline in customer traffic in major shopping malls.
Customers also put on hold purchases of high price-ticket electronic items as SA economy stagnated last year. The tech retailer also faced stock supply challenges causing its outlets to underperform.
Masscash, which consists of wholesale and cash & carry outlets like Jumbo and Rhino which target low-income groups, had experienced severe price deflation in staples like maize, oil and sugar in some of its brands.
Massmart started converting some of underperforming brands, like Rhino, to Cambridge Food Retail to help lift their profits.
The company said Monday it will advise shareholders about its progress on the store closures at a later stage, once the retrenchment process consultations are complete.