Massmart has appointed Walmart Japan’s former interim president and Chief Executive Officer, Mitchell Slape as its new CEO, succeeding Guy Hayward who resigned in May.
While Massmart remains a dominant force – it controls almost 40% of the local market for household appliances – in the past year alone, its headline earnings declined 23%.
Last week, its share price tanked 10% – wiping out almost R2 billion in a morning – after warning that its earnings for the current six months will be at least 50% lower than last year. Sales growth at all of its retail stores are sluggish, and were below 4% for the first twenty weeks of its new financial year.
Increasing competition on price, particularly from rival retailer, Pick N Pay and the rise and rise of Takealot, has also contributed to its woes.
Game and Dion Wired seem to be a particular problem for Massmart. Their trading profit plummeted from R374 million to R33 million in the past year. In its latest trading update, however, sales appear to have slowed at Builders Warehouse.
Slape will begin from the first day of the month following the approval date, Massmart said in a statement.
