South African retail giant, Massmart which operates Game Stores in Kampala has announced it’s plan to exit the Ugandan market.
The South African franchise revealed this last Friday during a shareholders’ virtual financial results presentation.
Massmart Chief Executive, Mitchell Slape revealed that in the next six months they seek to find a buyer to concentrate on it’s operations in South Africa.
” We are completing the relay of 64 Game Stores within six months since the inception of the programme in February, 2021,” Slape said.
Slape further said among other negotiations, the company was discussing to reduce Game stores’ portfolio exposures in East and West Africa. This move involves selling it’s one store in Uganda, one in Tanzania, three in Kenya, four in Ghana and five in Nigeria.
The Massmart chief executive officer explained that it is the difficult business environment that has pushed the supermarket franchise to exit it’s under performing stores outside South Africa.
” The performance and the complexity in running those businesses is something that frankly we needed to address. We have commenced a formal sales process, we are currently in discussions with potential purchasers to be take on those stores,” Slape said.
“But that is not enough. Achieving break-even performance isn’t going to be sufficient for us to be satisfied, we have got to really get Game back to a healthy level of profitability and performance,” he added.
Massmart exits in the affected countries will include the sale of food stores and carry stores for a consideration of $93.9 m ( R1.36) within five months which will deliver annual profit before interest and tax improvement of approximately $51.8 million ( R750) per annum.
Game stores’ exit comes barely a week after Shoprite announced it’s exit from Uganda and Madagascar.
Retail businesses have faced tough economic times in the last five years that have forced other retail franchise such as Kenyan based Nakumatt, Uchumi and Tuskys to exit all their operations outside Kenya.
Massmart is Africa’s third largest distributor of consumer goods and one of the biggest retailers of general merchandise, liquor and home improvement equipment and supplies.
Massmart opened Game stores in Uganda in 2004 and it is based in Lugogo, Kampala.