Pepkor calls it quits in Zimbabwe

After struggling to trade amid soaring inflation, fuel shortages and stagnant wages.

South African retailer Pepkor Holdings said on Monday it will exit Zimbabwe after an economic crisis in the country hurt its performance.

The company, whose brands include Pep Stores, Ackermans and Shoe City, has closed the remaining 20 stores in Zimbabwe, bringing to an end its 20-year presence in that country.

Severe shortages of foreign currency, fuel and electricity have sent inflation soaring to its highest since 2008, and dashed hopes the economy might recover under President Emmerson Mnangagwa, who took over from Robert Mugabe in 2017.

“The decision to exit Zimbabwe was based on the continued adverse macroeconomic conditions affecting trading and the weakening currency,” Pepkor’s statement said.

Its Zimbabwe business made a loss of R70 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 30 September.

Headline earnings per share, the main profit measure in South Africa that strips out certain one-off items, stood at 96.8 cents, verses 84.5 cents a year earlier. Revenues from continuing operations grew by 9 percent to R69.6 billion.

Pepkor flagged earlier in November that it would need to take a R1.2 billion charge related to its building materials unit that has struggled in a tough market.