By Adedapo Adesanya
South African retail franchise, Mr Price, has announced that it is leaving Nigeria due to weak economic growth, difficulties with repatriating funds and local procurement.
This was disclosed by the Chief Executive Officer (CEO) of the retail store, Mr Mark Blair, during the presentation of the group’s full-year results on Thursday.
According to the CEO, the company made money in the early days of their investment in the country but has now been hit by too many roadblocks.
He said as a result of these hoodwinks, it was time to exit Nigeria after walking away from Australia and Poland in 2019.
Mr Price, which reported a 10.4 percent fall in annual earnings, has closed four of its five stores in the country and expects to close the last one in the coming months, Mr Blair said.
“Quite frankly, I’m not prepared to invest any further whether it’s investment in time or in money into a country that is volatile as it is.
“In the early days, we were making money but now we just came up against too many roadblocks, whether it’s getting the money out, etc,” he said.
Before its entry into the country, Mr Price had expected the Nigerian market to support 50 to 100 stores because of its population, currently estimated at over 200 million but now, the Group said it is reviewing its franchise operations.
In recent years, Mr Price has taken a cautious approach to international expansion across and outside Africa as organic growth has proven challenging and “distracting”.
The company’s decision to exit Nigeria follows a decision by homeware and clothing retailer TFG last week to leave Kenya and Ghana.
According to its latest figures, Mr Price saw revenue in the year to March 28 rise 2.1 percent to 23 billion rands ($1.32 billion), with retail sales up by 1.5 percent, boosted by clothing and home divisions.
It also did not declare a dividend for the period in order to preserve cash.
The company said it has identified 300 million rands worth of cost-saving initiatives, which are largely related to employment costs and also include a 23 percent reduction in budgeted capital expenditure for the 2021 financial year, group CFO, Mr Mark Stirton said at the presentation.
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