OK Zimbabwe, the largest retailer in the country by store numbers, has closed five of its branches due to a difficult economic environment, as reported by Business Weekly.
However, critics are pointing to other factors that have contributed to the closures, including an overly large management structure with at least nine directors and over 30 senior executives, all of whom are provided with luxury vehicles and generous perks.
Concerns have also been raised regarding the company’s leadership decisions, such as numerous land acquisitions and dividend payouts, which have reportedly tied up cash or led to misallocation of funds in recent years.
Furthermore, OK has been facing issues in maintaining stock levels, especially in food items, with many of its stores seeing empty shelves.
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Suppliers have been hesitant to offer goods on credit or in local currency, compounding the retailer’s challenges.
The company is also dealing with significant debt, owing US$17 million and ZAR 537 million to suppliers. Some suppliers have withheld goods despite receiving partial payments.
In an internal memo, OK Zimbabwe announced plans to shut down branches in Robson Manyika, Glen Norah, Kuwadzana Express, Mbare (all in Harare), Chitungwiza Town Centre, and Entumbane in Bulawayo. A sixth store is set to close in March. The closures will result in job cuts, mainly affecting lower-level employees. Severance packages will include one month’s salary for each year of service, three months’ notice pay, and compensation for unused leave.
