Despite losing an absolute fortune on its investment, Walmart has decided to double down on Massmart and make an offer to buy the entire thing. Perhaps “double down” is the wrong description — this is more about “averaging down” as the original deal in 2011 of R148 per share worked out to about $21, whereas this deal at R62 per share is a paltry $3.60. The rand has collapsed over this period, and so has Massmart’s business model.
The retail industry is incredibly tough, especially in SA. Retail chains experience a painful cocktail of load-shedding, electricity inflation well above general inflation, constant pressure on consumers, high security risks and associated costs and challenging supply chains that must run the gauntlet of crime and fuel costs. As Dorothy learnt before Walmart did, we’re not in Kansas anymore. ..
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Source: FinancialMail - 🏆 20. / 63 Read more »
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Source: FinancialMail - 🏆 20. / 63 Read more »