South Africa’s Pepkor Holdings which operates Pep stores has announced its intention to exit the Zimbabwean market due to economic challenges that have continuously strained the group’s performance.
Several challenges including foreign currency repatriation, fuel and electricity has continued to hut the South African headquarted retail group’s performance through its unit, Power Sales.
Since takeover by Emmerson Mnangagwa as President in 2017, the Southern African slided into massive hyperinflation which has seen a lot of companies downsizing while some have been closing shop.
“The decision to exit Zimbabwe was based on the continued adverse macroeconomic conditions affecting trading and the weakening currency,” said Pepkor in a statement.
Pepkor’s Zimbabwe unit made a loss of US$4.8 million, including the full impairment of the disposal of the group’s assets, it added.
Overall, Pepkor, 71 percent owned by scandal-hit retailer Steinhoff International, said its profits grew by 14.5 percent in the year to Sept. 30.
The recent decision on Zimbabwe comes after Pepkor flagged earlier in November last year that it would need to take a 1.2 billion rand charge related to its building materials unit that has struggled in a tough market.
Pepkor chief executive Leon Lorens said the company was satisfied with its performance given the difficult retail environment in South Africa.