SA’s Game Stores rolls out plans to exit Nigeria and other African countries in December

According to Reuters, Massmart Holdings Limited, a South African (SA) company and the continent's second-largest consumer products distributor, has revealed plans to close down 14 Game stores spread across Nigeria, Ghana, Uganda, Kenya, and Tanzania.

The chief executive of Massmart, Mitch Slape, revealed this on Friday. It is not shocking that Nigeria is included in the departure because recent store closures by SA retailers like Shoprite and Mr. Price were caused by the country's unstable currency and low consumer demand.

“The performance and the complexity in running those businesses is something that frankly we needed to address. We’ve commenced a formal sales process, we’re currently in discussions with potential purchasers to take on those stores,” Slape told investors.

Neville Hatfield, vice president of merchandise at Game, who also signed the letter, claimed that on October 4, 2022, the business informed the public that it had started talking to its Nigerian employees about the possibility of closing Game stores. The move follows a decision to halt negotiations with Xanderwill Limited to purchase its stores in Nigeria.

In a similar vein, Game will fulfill its unfulfilled commercial obligations to its Nigerian business partners. Hatfield stated that the business intends to start a stock clearing sale in its stores in Nigeria as the immediate next move.

“We anticipate that the last trading day for Game Nigeria will be on 25 December 2022. We will contact you within the next weeks to finalize commercial expectations and arrangements with yourselves. Thank you for your service to Game Nigeria, we are so sorry that we have been unable to continue our operations in your country,” Hatfield said.

On or around December 25, Games Stores will also close its locations in Kenya, Ghana, Uganda and Tanzania.

The Johannesburg Stock Exchange-listed firm claims in a written notice to the Kenya Union of Commercial Food and Allied Workers ("the Union") that it has informed all of its associates and employees of the planned closure.

According to Slape, the group would review its retail portfolio outside Southern Africa as part of its recovery plan to stabilize the enterprise.

Slape added that the decision will lead to an improvement in yearly profit before interest and tax of R750 million ($50.2 million).

Massmart aims to narrow company's focus and increase investment in high-yield assets and online by selling non-core and unprofitable assets and closing stores.

Due to ongoing currency weakness, game sales from the remaining stores in Africa decreased by 18.6% in rand values and by 5% in constant currencies in the 26 weeks that ended in June, according to Massmart.

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