Troubled retailer Choppies to exit Kenyan market
By Reuters | December 16th 2019
Botswana budget retailer Choppies will exit three more African markets, the company announced late on Friday.
This came less than a fortnight after it said it would sell its loss-making South African operations for only one rand (Sh7).
The company added that it posted a 445 million pula (Sh4.8 billion) loss after tax in delayed results for the financial year ending June 2018.
Choppies will dispose of its operations in Mozambique, Tanzania and Kenya, halving its footprint to just four countries, it said in an announcement through the Botswana Stock Exchange late on Friday.
The group will continue operating in Botswana, Zimbabwe, Zambia and Namibia.
“Negotiations to sell the Tanzanian subsidiary are at an advanced stage, while the boards have also taken a decision to downscale its operations in Kenya and dispose of the stores to the local operators,” it said in the statement accompanying delayed financial results for the year ending June 2018.
It added that Choppies’ only store in Mozambique would be closed. It ceased trading on September 2019.
Choppies saw its shares plunge by more than 60 per cent last September after announcing a delay to the publication of its financial statements.
The results were delayed after auditors raised concerns with the board about accounting practices for the year ended June 30, 2018 and prior years.
Botswana Stock Exchange CEO Thapelo Tsheole told Reuters on Saturday that Choppies would remain suspended from the bourse until the company releases its results for the half-year period to December 2018 as well as for the full-year to June 2019.
In September, the retailer laid off over 200 workers in its Kenya operations as it started preparing for its exit from the market.
Letters signed by the company’s Human Resource Manager Joshua Were said there were ongoing talks with the workers’ union on a compensation package.
“This termination is due to the reduced business which has been running for several months which you are aware of, and the company is unable to sustain the current wage bill,” read the letter.
The retailer announced it had listed its Kenyan assets for sale besides classifying its 12 stores as distressed.
Choppies has experienced financial upheaval for most of the year, with suppliers going unpaid for months.
On May 22, the firm fired Chief Executive Ramachandran Ottapathu following the suspension of its share trading on the Johannesburg and Botswana stock exchanges.
The board appointed Farouk Ismail as interim CEO and Redford Capital as the turnaround managers. [Additional reporting by Standard team]
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