Massmart plans further store closures as it flags FY loss

South African retailer Massmart is planning further store closures, it said on Friday, as it flagged a deeper loss last year of more than R1.7 billion ($116.8 million) after curbs related to the Covid-19 pandemic hammered sales.

Massmart, majority owned by US wholesaler Walmart Inc , said it would close an additional 14 Masscash cash and carry stores as part of its turnaround plan to re-organise the group.

In 2020 Massmart announced its intention to potentially close 11 underperforming Masscash stores, but later identified a potential buyer for eight of those.

The Masscash division includes the Jumbo cash and carry wholesaler, Cambridge Food, and Rhino cash and carry stores.

The Game and Makro department chain owner said it expected a net loss of between R1.712 billion and R1.777 billion in the year to December 27, compared to a net loss of R1.308 billion a year before.

Massmart estimated that lockdown curbs, including extended restrictions on liquor trading, lowered its 2020 sales by at least R6 billion year-on-year.

The company also expects net debt during the year to rise by around R200 million from the previous year. Total interest costs are expected to be around 3.4% lower.