(Bloomberg) -- Massmart Holdings Ltd. is looking to a new chief executive officer to help arrest a slump even as the South African retailer controlled by Walmart Inc. sees a further deterioration in the nation's consumer environment.
The household goods specialist reported total sales of 43.8 billion rand ($2.8 billion) in the six months through June, up 5.5% from a year earlier, reporting a net loss of 836 million rand from a year-earlier profit, the Johannesburg-based company said in a statement on Thursday.
With no catalyst to revive a moribund South African economy, Massmart expects full-year earnings to drop at least 50% from a year earlier.
Key Insights
- Mitchell Slape will start as new CEO next week after Massmart in May said the 24-year Walmart veteran would be in charge of leading a turnaround. The Johannesburg-based company cut its full-year dividend by 40% earlier this year and scrapped its interim dividend because of the loss.
- Some analysts have questioned if Walmart may even pull out of South Africa, as the country is one of the global retailer's most vulnerable markets. Walmart bought a majority stake in Massmart in 2011 for 16.5 billion rand and has also reported hurdles in China, India and the U.K.
- It's certainly not easy for any of the South African retailers as the continent's most-industrialized economy battles with stubbornly high unemployment and consumer confidence that's been dented by rising taxes, fuel costs and other bills.
Market Reaction
- Massmart's shares have slumped 62% this year, the most of the 13 stocks on the FTSE/JSE Africa General Retailers Index. The stock fell the most since at least 2000 on July 30 after reporting a first-half loss.
Get More
- For more details from the statement, click here
- Walmart's South African Unit Falls by Record After Loss
- Walmart Sends Veteran to Fix Ailing South Africa Business
- Walmart May Have to Exit More International Markets
To contact the reporters on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net;Roxanne Henderson in Johannesburg at rhenderson56@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Bowker, Vernon Wessels
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