OK Zimbabwe closes 11 stores

Debt-laden retailer OK Zimbabwe Limited (OK) has shut down 11 of its outlets in a sweeping consolidation drive aimed at reducing losses and alleviating liquidity pressures, the company announced in its latest market update. The closures reduce OK's national store footprint to 62 outlets.

The group has been struggling with a sharp revenue decline since last year, citing supply chain disruptions, unstable exchange rates, dwindling consumer spending, liquidity constraints, and increased competition from the informal sector as key challenges. These pressures have saddled the company with over US$30 million in debt, which it is addressing through a US$20 million capital raise via a renounceable share rights offer and planned sales of freehold properties expected to generate US$10,5 million.

For the financial year ended March 31, 2025, OK reported a loss of US$25,03 million, nearly 40 times worse than the previous year, reflecting the company's deteriorating finances. The audited results, however, showed a modest improvement from the initial unaudited loss of US$29,61 million. Comparatively, the audited loss for 2024 narrowed to US$619 367 from an initial unaudited loss of US$11,04 million.

In the restructuring plan, three Food Lover's Market outlets were closed, with franchises not renewed, while three additional stores are in the process of closure. OK indicated that stores operating in strategic, high-performing locations will continue, with resources and product supplies redirected to outlets capable of improving stock turnover and liquidity generation.

The company is also redeveloping the Chisipite Shopping Centre, with plans to relocate the Bon Marche supermarket to a larger, newly constructed facility. Additionally, a new, more spacious store has been built at Makoni Shopping Centre to allow the outlet to better compete in a busy retail area.

Cost-cutting measures have led to a 35% reduction in operating costs, with a further 15% expected by December 2025. The loss-making pharmacy business has also been closed, and head office support staff has been reduced as part of the ongoing rationalisation.

OK acknowledged that property sales intended to raise US$10,5 million have taken longer than expected, with some transactions still under review. Efforts to dispose of additional properties and boost liquidity remain ongoing.

The company has engaged suppliers to agree on outstanding balances as of February 2025, implementing partial settlements to resume stock supply. However, trading terms have limited the ability to rebuild inventory levels, a situation OK is actively seeking to resolve through extended credit arrangements with suppliers.

Despite these measures, OK warned that revenue generation remains below break-even levels, with ongoing constraints tied to limited product supply and short trading terms. The company affirmed that it will continue rationalising operations, focusing on its core retail business while appealing to suppliers for collaboration during the peak summer trading season.