The head of Walmart Inc.'s operations in South Africa will leave the company by the end of the year as the unit continues to struggle amid a harsh retail environment.
Gus Hayward, chief executive officer of Massmart, told directors he would work with them to ensure a smooth transition in leadership, the company said Monday in a news release. The search for a successor is already underway, the company said.
Walmart acquired a 51% stake in Massmart Holdings Ltd. for about $2.4 billion in 2011. Massmart, based in Johannesburg, operates more than 420 stores in 13 countries in sub-Saharan Africa. According to Walmart's website, Massmart is the second-largest distributor of consumer goods in Africa, the leading retailer of general merchandise, liquor and home improvement equipment and supplies, and the leading food wholesaler.
Hayward took the helm at Massmart in 2014. The company said in its statement that he "has guided Massmart through exceedingly challenging market conditions and has worked to position the business for future growth." Under his leadership, it said, Massmart has seen the introduction of value-added services, development of a shared group logistics service and the implementation of e-commerce sales in three of the company's 12 brands.
Massmart Board Chairman Kuseni Dlamini said in the statement that in nearly 20 years with the business, Hayward "has been a valued contributor to many of the company's defining milestones," such as its listing on the Johannesburg Stock Exchange, the closure of the Walmart deal and multiple corporate acquisitions.
The announcement of Hayward's resignation came almost a week after Massmart said in a regulatory filing it had appointed a new chief financial officer. Mohammed Abdool-Samad will step into the role on Aug. 1, replacing Johannes van Lierop, who said in February that he would step down for personal reasons. However, van Lierop said he would remain available until later in the year to support Abdool-Samad in his new position.
According to a year-end presentation to analysts, an economic downturn in South Africa created a "constrained consumer environment" during Massmart's fiscal 2018, which corresponds to the calendar year. Retailers are faced with increases in unemployment, inflation, value-added tax and fuel prices -- all of which rein in consumer spending.
"Our 2018 performance disappointed shareholders, the investment community and ourselves," Hayward said in the presentation. But he said, "We remain resolute to deliver Massmart's areas of long-term strategic focus."
The company's identified strategic priorities included opening 43 stores by December 2021, mostly in South Africa. However, it also said it would "selectively curtail new store growth and focus on reducing working capital levels."
Massmart shares have fallen more than 32 percent since 2014 when Hayward took on the chief executive role.
Business on 05/07/2019