Massmart South Africa has declared it will potentially close up to 34 stores and cut 1 440 jobs of two of its brands as the holding firm struggles with a tough economy.
Those two brands are Dion-Wired and Masscash. Dion Wired is a purveyor of electronics and appliances while Masscash is a wholesale division comprising of cash and carry, food and cosmetics outlets.
According to a report by EWN, all of Dion Wired’s 23 stores are currently under review and the 624 employees hired at these stores are at risk of losing their jobs.
Massmart had a rather rough 2019, recording its first half-year trading loss in August. This coupled with low growth, high unemployment and the ever rising cost of living in South Africa has seen South Africans spending less on luxury goods such as those sold by Dion Wired.
The holding company began “a potential store closure” consultation process with employees on Monday. Massmart said it was also engaging with unions and other stakeholders.
Rather worryingly for the employees at risk, Reuters reports that Massmart’s share price was up this morning on the back of news that it will potentially be culling ailing brands.
While we understand the need to be profitable, we really do worry about the 1 440 employees who may no longer have a job at the close of Massmart’s consultations.