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Choppies exits Zimbabwe with US$1 million loss
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Botswana-based retail giant Choppies Enterprises Limited has confirmed it incurred a loss of P14 million (approximately US$1.02 million) following the disposal of its Zimbabwean operations in December 2024, citing persistent economic instability and currency volatility.
The development was revealed in Choppies' unaudited interim financial results for the six months ended December 31, 2024. The company disclosed that its Zimbabwe segment had become a financial liability, with dwindling returns and mounting operational costs.
"The Choppies Zimbabwe segment foreign currency translation reserve and hyperinflationary reserve were reclassified to retained earnings on disposal," the group stated.
Choppies' departure from Zimbabwe was attributed to high inflation, an unstable local currency, and persistent foreign currency shortages - challenges that have plagued many retailers operating in the country.
Choppies' Zimbabwe unit had been part of the group's southern African retail network, trading under Nanavac Investments (Pvt) Ltd. At the time of its exit, the subsidiary operated 31 stores across Zimbabwe and employed 1,051 people.
The supermarket group reported that expenses rose 22.9% during the period under review, driven in part by the costs of new store openings, inflation, and the loss from the Zimbabwe unit's disposal. Even when excluding the impact of exchange losses, business sales, and impairments, expenses still increased by 21.8%.
Total operating expenses for the group reached P815 million (US$59.44 million).
Further contributing to Choppies' losses was an P8 million (US$583,273) hit from lease modifications and terminations associated with the Zimbabwe exit.
Revenue from Zimbabwe was also on the decline, falling to P260 million (US$18.95 million), down from P278 million (US$20.26 million) in the same period the previous year.
At the time of sale, Choppies Zimbabwe had a debt of P89 million (US$6.48 million), representing a 13% increase from the previous financial year. Its assets included P29 million (US$2.11 million) in property, plant, and equipment and P37 million (US$2.69 million) in inventories - both down from the previous year.
Trade receivables, however, remained unchanged at P4 million (US$291,670).
The buyer of the Choppies Zimbabwe operation was confirmed as Sai Mart, a local retail chain owned by Deputy Minister of Industry and Commerce, Raj Modi. Sai Mart has been expanding its footprint in southern Zimbabwe, and the acquisition is seen as a strategic move to grow its retail market share.
The retailer said its decision to dispose of its Zimbabwe unit and other non-performing ventures - including a medical distribution business - is part of a broader strategy to streamline operations and focus on profitable segments.
"We will also benefit from the remaining segments in the group, which are all performing or in a strong turnaround stage," Choppies stated.
While the company has cut ties with Zimbabwe, it maintains a strong presence in Botswana, South Africa, Zambia, and Namibia, where it aims to consolidate its market position amid challenging regional economic conditions.
The development was revealed in Choppies' unaudited interim financial results for the six months ended December 31, 2024. The company disclosed that its Zimbabwe segment had become a financial liability, with dwindling returns and mounting operational costs.
"The Choppies Zimbabwe segment foreign currency translation reserve and hyperinflationary reserve were reclassified to retained earnings on disposal," the group stated.
Choppies' departure from Zimbabwe was attributed to high inflation, an unstable local currency, and persistent foreign currency shortages - challenges that have plagued many retailers operating in the country.
Choppies' Zimbabwe unit had been part of the group's southern African retail network, trading under Nanavac Investments (Pvt) Ltd. At the time of its exit, the subsidiary operated 31 stores across Zimbabwe and employed 1,051 people.
The supermarket group reported that expenses rose 22.9% during the period under review, driven in part by the costs of new store openings, inflation, and the loss from the Zimbabwe unit's disposal. Even when excluding the impact of exchange losses, business sales, and impairments, expenses still increased by 21.8%.
Total operating expenses for the group reached P815 million (US$59.44 million).
Revenue from Zimbabwe was also on the decline, falling to P260 million (US$18.95 million), down from P278 million (US$20.26 million) in the same period the previous year.
At the time of sale, Choppies Zimbabwe had a debt of P89 million (US$6.48 million), representing a 13% increase from the previous financial year. Its assets included P29 million (US$2.11 million) in property, plant, and equipment and P37 million (US$2.69 million) in inventories - both down from the previous year.
Trade receivables, however, remained unchanged at P4 million (US$291,670).
The buyer of the Choppies Zimbabwe operation was confirmed as Sai Mart, a local retail chain owned by Deputy Minister of Industry and Commerce, Raj Modi. Sai Mart has been expanding its footprint in southern Zimbabwe, and the acquisition is seen as a strategic move to grow its retail market share.
The retailer said its decision to dispose of its Zimbabwe unit and other non-performing ventures - including a medical distribution business - is part of a broader strategy to streamline operations and focus on profitable segments.
"We will also benefit from the remaining segments in the group, which are all performing or in a strong turnaround stage," Choppies stated.
While the company has cut ties with Zimbabwe, it maintains a strong presence in Botswana, South Africa, Zambia, and Namibia, where it aims to consolidate its market position amid challenging regional economic conditions.
Source - the independent
