South African retailer fails to sell game stores, chooses to close

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South African retailer fails to sell game stores, chooses to close


game

Shoppers at the Game Store in Garden City Mall. FILE PHOTO | NMG

South African retailer Massmart, which runs the games stores, has opened talks with staff about the planned closure of its three stores in Kenya after efforts to sell the business failed.

The Johannesburg Stock Exchange-listed retail giant said on Wednesday it failed to find domestic buyers for its 14 gaming stores in Kenya, Uganda, Tanzania, Ghana and Nigeria after putting them on the market last year.

Read: South Africa retail store Game exits the Kenyan market

“Massmart initiated a process over a 12-month period to explore… the possibility of selling our East and West African stores to local investors. Unfortunately, this initiative did not deliver a meaningful outcome,” the company said.

Massmart CEO Mitchell Slape said last year the chain had begun a formal sale process to divest five gaming stores in Nigeria, four in Ghana, three in Kenya, one in Uganda and one in Tanzania.

The dealer said it had struggled to crack the markets, leading to losses.

Massmart, which is majority-owned by US super chain Walmart, made its debut in Kenya with Game Stores in 2015 with its first store at Garden City Mall to cash in on the growing demand for retail outlets in the country. It subsequently opened two other stores at Waterfront in Karen and Mega City Mall in Kisumu.

Massmart also opened a building materials store, Builders, at the Waterfront Mall in 2020. The company said Business Daily last year it would not dispose of it.

Massmart has been making losses and losing market share to larger local rivals in South Africa, forcing majority owner Walmart to cut costs and invest more capital in turning the company around.

Last month, Walmart launched a 6.4 billion rand ($377.6 million) offer for the remaining 47 percent of Massmart that it does not already own.

The world’s largest retailer had acquired a 51 percent stake in Massmart in 2010 for $2.3 billion, an investment seen as an outlay to use South Africa as a base to grab a piece of the so-called ‘Africa growth story’ ‘.

Read: Walmart offers to buy out the rest of the African retailer Massmart

But it has struggled since then against highly competitive and highly profitable local retailers such as Shoprite and Woolworths, curtailing the company’s aim to expand further in Africa and shaving nearly three-quarters of its market value over the past decade.

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