adminSouth Africa. — South African retailer Pepkor Holdings said yesterday it will exit Zimbabwe after an economic crisis in the country hurt its performance.
“The decision to exit Zimbabwe was based on the continued adverse macroeconomic conditions affecting trading and the weakening currency,” Pepkor’s statement said.
Pepkor operates retail shops under the PEP brand in South Africa. In Zimbabwe, the company was operating 39 outlets as Power Sales, after buying one of Zimbabwe’s most recognisable retail brands.
Its Zimbabwe business made a loss of R70 million (US$4,8 million), including the full impairment of the disposal of the group’s assets, it added. The exit comes as some foreign companies are finding it hard to operate in Zimbabwe due to currency instability.
Last week cement maker PPC highlighted some of its challenges saying: “The currency reforms implemented in Zimbabwe this year had a material effect on the group’s figures. The devaluation between the Zimbabwean dollar introduced this year and the South African rand as well as the application of the provisions of IAS 29 — Financial Reporting in Hyperinflationary Economies had an adverse effect on group’s results.”
Bongani Ndlovu
Online Reporter