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
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