Retail giant Massmart, which owns Makro, Game and hardware chain Builders Warehouse, continued its sluggish performance in the first half of 2021.
That detail dragged its share price down by more than 10% as investors saw through the “base effects” behind the sales increase. The poor performance, and the added impact after about 50 Massmart stores were hit by violence and looting in July, raised the familiar question of whether Walmart would look to cut its losses after buying a controlling stake in Massmart in 2011.
Massmart, in the trading report, also warned that the damage from the looting might not be entirely covered by insurance, possibly putting further pressure on its already strained balance sheet. The firm’s Makro stores in Pietermaritzburg and Springfield were particularly affected, with millions of rands of stock stolen, and the shops and warehouses burnt.
Game’s sales plunged by 7.6% to R7.6-billion. Total sales in Cambridge of R3.6 billion were 9.4% lower than 2020. By close on Monday, Massmart shares had recovered some of the ground they shed on Friday, gaining close to 6% on the JSE to R58.18 per share.
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