Walmart-owned South African retailer plans sale of three units

Massmart is planning to sell Cambridge, cash-and-carry chain Rhino and Massfresh as it looks to turn around its operations

A worker arranges fruits on a shelf at Makro Store Riversands of South African retailer Massmart. The retailer is planning to sell three of its units as it looks reorganise its operations. Reuters 

Massmart Holdings is selling three more units as the Walmart-owned South African retailer steps up efforts to turn around the company.

Barclays has been appointed to dispose of food-seller Cambridge, cash-and-carry chain Rhino and Massfresh, which is made up of The Fruitspot and a meat-processing facility, Massmart said in a statement on Monday. It has not yet had any talks with specific buyers, chief executive Mitchell Slape told reporters by phone.

“This is all about sharpening our management focus,” Mr Slape said. “It’s about allowing management to have the time, the energy, the attention, the capital so that we can invest properly.”

News on progress with the retailer’s reorganisation came as the Johannesburg-based company reported a narrowed loss for the 52 weeks ending December 27. Massmart has already cut 60 per cent of the 600 million rand ($39m) it’s targeted in savings this fiscal year. The shares jumped 21 per cent, the most on record.

Walmart sent Mr Slape from the US-based parent company to turn around Massmart in 2019, though his task was swiftly made even tougher by the coronavirus pandemic and associated lockdown rules. Under his leadership, the company has cut jobs, shut its Dion Wired chain, disposed of underperforming Masscash stores and stopped selling fresh food in its household-goods chain Game.

The retailer has been yet another international headache for Walmart, which has also had difficulties in China, India and the UK and sold off assets in Brazil in 2018.

Massmart said it’s also considering exiting some African countries outside of its home market and immediate neighbors as part of the reorganisation, though there may be some “that we decide to double down in and invest further”, Mr Slape said.

“There is no question in my mind that there is upside potential for retail growth” in Africa, he said. Even in the “more immediate term, customer strength is beginning to return as we move out of Covid restrictions.”