Massmart Announces A Net Loss Of R6 Billion Due To The Pandemic
Massmart Announces A Net Loss Of R6 Billion Due To The Pandemic. Whether a business is small or large, the Covid-19 pandemic has a dire effect on the businesses productivity and sales that resulted to the businesses not generating profit but only generating losses. This is due to South Africa’s lockdown regulations that forced businesses to close if they didn’t provide essential products or services. Massmart, announced on Friday (19 February) that provided sales for the 52 weeks, show total sales lost for the year 2020 due to Covid-19 restrictions to be at least R6.0 billion when compared to 2019.
“We are encouraged by strong sales growth relating to Home Improvement, which grew by 8.1% over the course of H2 2020, showing strong growth in the fourth quarter,” it said in a statement. In January 2020, Massmart announced its intention to close Dion-Wired and 11 under-performing Masscash stores. It also communicated that it had identified a potential buyer for eight of 11 Masscash stores.
“The potential sale of the remaining three stores is still being contemplated. Subsequent to the announcement of the aforementioned 11 Masscash stores, a decision was taken
to divest the Qwa Qwa Masscash store. A suitable buyer was found for the store and the transaction will close shortly.” It said in a statement.
Massmart Holdings Limited (JSE: MSM) is a South African firm that owns local brands such as Game, Makro, Builder’s Warehouse and CBW. It is the second-largest distributor of consumer goods in Africa, the largest retailer of general merchandise, liquor and home improvement equipment and wholesaler of basic foods.
Game and Makro said it expected a net loss of between 1.712 billion rand and 1.777 billion rand in the year to Dec. 27, compared to a net loss of 1.308 billion rand a year before. Massmart estimated that lockdown curbs, including extended restrictions on liquor trading were the cause behind these loses.
Massmart, which is majority owned by U.S. wholesaler Walmart Inc WMT.N, said it would close an additional 14 Masscash cash and carry stores as part of its turnaround plan to re-organise the group.
