BOTSWANA – Choppies is exiting South Africa, Kenya, Tanzania and Mozambique to cut its losses.
The supermarket chain, which reported half-year losses of R139 million (US$12.15m) to December 31, 2019, says it will not focus on its Botswana unit, where it is listed.
Its operations in Zimbabwe, Zambia and Namibia will be maintained but rather than its previous aggression in expanding its footprint, Choppies now plans a “careful, phased approach”.
“We’re exiting from a few markets where the growth has been coming at the expense of Botswana and when we stop funding the loss-making areas, shareholders will see the value back to them,” Choppies CEO, Ramachandran Ottapathu said.
“In the remaining markets, we will have balanced growth and the expansion will be slowed down and done in a phased manner.
“So, Botswana, maybe add a couple of stores this year, Zambia is self-sustaining and growing slowly, Zimbabwe we will take a look at the market and how it goes and Namibia we need to grow there.”
Ottapathu, popularly known as Ram, publicly crossed swords with several non-executive directors at a tempestuous EGM last September over issues of strategy and his alleged reluctance over the years to facilitate a board investment committee to oversee the type of expansion Choppies needed.
In particular, former chair, Festus Mogae, who is also the country’s third president, accused Ram of steamrolling over the board’s objections to the aggressiveness of the expansion strategy.
Mogae and other non-executives were voted out of the board last September and Ram, at the time also facing forensic and legal probes, was able to regain a supportive board.
Since then, the probes have focussed on fraudulent activities in the groups, while Ram and his executives have sought to restore frayed relations with investors, suppliers and lenders.
Botswana newspaper Mmegi was the first to report the retailer’s exit from the four African nations on Monday.
Source: Zim Live