Shoprite Holdings has finalised plans to sell its Nigerian subsidiary, Retail Supermarkets Nigeria Limited, under which Shoprite Nigeria operates.
The winding up of the company’s operations is happening 15-years after its entry into Nigeria.
The company had announced last year that sales wasn’t good in Nigeria coupled with the COVID-19 pandemic that shut retail market operations down, sales significantly declined.
Sales declined by 6.3 percent during the year, and in its non-South African markets, sales declined by 8.4 percent in rand terms, but contributed to 10.2 percent of Group sales. The declining sales had compelled Shoprite to make a divestment from Nigeria.
The retailer planned ending of 2020 to quit the Nigerian market, but Shoprite has changed its exit date to the fourth quarter of 2021. This was revealed in its six months ended December 2020 report.
Last year, Shoprite stated, “Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year. Any further updates will be provided to the market at the appropriate time.”
However, new development from the company state, “We hereby confirm that the terms of sale have been concluded and that the transaction has been lodged with the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) for approval.
“Management expects the transaction to be approved by the end of the 2021 financial year.” Shoprite said in its financial statements for six months ended December 2020.
In its 26 weeks to December 27, 2020 report, while addressing its market outside South Africa, the retailer said it is managing cost in Nigeria and it is “at the approval stage in terms of the sale of our Nigeria supermarket operation.
“From here, our capital allocated to the region remains at a minimum and we continue to manage costs as best as we can.” Shoprite disclosed.
The company has about 25 stores which will be handled by a new owner at the end of this year. Although, the Nigerian subsidiary is struggling to keep business in order as protests continue to prevent operations from running as usual.
The Ibadan store were closed last week, while some weeks ago, the Lagos branch also recorded its own protest which is over gratuity promised to the Nigerian workforce by shoprite, current owner of Nigerian subsidiary.