Choppies keeps Zim focus, exits four African markets

REGIONAL retailer, Choppies Enterprises, is exiting South Africa, Kenya, Tanzania and Mozambique but will keep focus on Zimbabwe and a few others, having suffered running shortfalls that contributed to the P139 million loss recently unveiled for the half-year ended December 31, 2019. By the end of 2018 Choppies’ Zimbabwe unit, a subsidiary of the Botswana Stock Exchange-listed group, had opened 33 branches in the country with Bulawayo, where it is headquartered, having 18 branches at that time. The Mphoko family, through Nanavac Investments, were initially the principal shareholder in the local business before they exited last year after a protracted legal battle.

The regional grocer now says it will focus its attention on its cash cow, Botswana, as well as Zimbabwe, Zambia and Namibia, but rather than its previous aggression in expanding its footprint, it now plans a “careful, phased” approach.

“We are exiting a few markets where the growth has been coming at the expense of Botswana and when we stop funding the loss-making areas, shareholders will see the value back to them,” Choppies CEO, Ramachandran Ottapathu said.

“In the remaining markets, we will have balanced growth and the expansion will be slowed down and done in a phased manner.

“We opened in Tlokweng recently and we are opening in Gumare maybe by September but after that there’s no lease assigned currently.

“We will look at territories where we can expand, where we don’t have representation.

“So, Botswana, maybe add a couple of stores this year, Zambia is self-sustaining and growing slowly, Zimbabwe we will take a look at the market and how it goes and Namibia we need to grow there.”

The retail group operated close to 125 outlets in southern Africa, 72 stores in Botswana and 35 in South Africa and had earlier indicated plans to increase branch network in Zimbabwe to 50.

Ottapathu, popularly known as Ram, is said to have publicly crossed swords with several non-executive directors at a tempestuous EGM last September over issues of strategy and his alleged reluctance over the years to facilitate a board investment committee to oversee the type of expansion Choppies needed.

In particular, former chair, Festus Mogae, who is also the country’s third president, accused Ram of steamrolling over the board’s objections to the aggressiveness of the expansion strategy.

Mogae and other non-executives were booted out of the board last September and Ram, at the time also facing forensic and legal probes, was able to regain a supportive board.

Since then, the probes have focused on fraudulent activities in the group, while Ram and his executives have sought to restore frayed relations with investors, suppliers and lenders.

The Botswana Stock Exchange last week lifted Choppies’ 20-month suspension from trading after the group filed all outstanding financials, a move that marked a major victory for Ram’s board and executive.

Shareholders who had pushed to remove Ram at the EGM and threatened to dump Choppies as soon as trading of its shares was allowed, failed to make a mark, as the retail group’s share price held steady amidst strong trading last week. — Mmegi/Business Chronicle

Leave a Reply

Your email address will not be published. Required fields are marked *