JONATHAN MOLAPO

Massmart, African retail and wholesale group which owns Makro, Game, and Builders, has announced that Jonathan Molapo will succeed Mitchell Slape as CEO from 1 January 2023.

Slape former Massmart CEO after taking up the role in 2019 is expected to step down on 31 December 2022.

Massmart chairman Kuseni Dlamini had a few things to say concerning the developments as he said “This is a wonderful moment for Massmart as we recognise top local talent to lead the company in its next phase of development”.

“Jonathan’s appointment has been part of a well-thought-out succession plan that started with his recruitment to the role of Massmart Chief Operating Officer in January 2022.”

He went further to state that the time allowed Molapo, the soon to be CEO to establish strong relatinoships with Walmart and his colleagues.

“I would like to thank Mitch on behalf of the Massmart Board for his immense commitment and contribution to Massmart under the most difficult of circumstances,” said Dlamini.

“The actions taken by the management team under his guidance have resulted in the successful delivery of more than 30 turnaround projects. Massmart is a better, more focused business thanks to the leadership provided by Mitch.”

Molapo has a BA in Economics from Laurentian University, Canada and has completed the International Executive Programme at the Insead Business School in France.

Molapo was initially at the Puma energy and Total SA group where he headed respective roles as chief operating officer and executive vice president for central and East Africa after which he joined Massmart from Astron Energy, where he was chief executive officer from June 2018 to December 2021.

During his time at Total, Molapo worked in Ghana and France before returning to Johannesburg to join Puma Energy.

“Having had the opportunity to get to know Jonathan since he joined the company, we look forward to working alongside him as CEO and building on our commitment to South African customers, associates and partners,” said Walmart International CEO Judith McKenna.

“We continue to see opportunity in Massmart and the impact the business can have, providing people across the region with greater access to goods and services they want.”

Walmart in addition to announcing the CEO succession plan also announced its intention of buying Massmart shares which it doesn’t own for R62 per share. The offer is said to exclude treasury shares.

“The past three years have been demanding, and the time is right to handover to a new leader, to guide the Group through the next phase of its evolution.”

“He and I have worked together closely for the past eight months and share views on the way forward,” Slape said while congratulating Molapo on his appointment

U.S retail giant Walmart Inc has launched a 6.4 billion rand ($377.6 million) offer to buy the remaining shares of South African retailer, Massmart. They bought the initial 51% in 2011 at R148.

The deal, if approved will delist Massmart which owns Makro, Game,and Builders Warehouse from the Johannesburg Stock Exchange.

Massmart shareholders will be offered R62 per share in cash. This is 53% higher than Massmart’s closing share price on Friday.

Walmart bought control of Massmart in 2010, which proved to be a disastrous deal. The value of its investment has slumped by 80% since then, as the retailer struggled in a weak economy with increased competition

In its half-year results, released on Monday morning, the company reported a large headline loss of more than R903 million, from a loss of R359 million in the same period last year. Sales grew almost 2% to R38.1 billion.

The US giant said that it has had to provide “increasing levels of support” to Massmart, including R4 billion in liquidity during the 2020 lockdown, over recent years. Walmart converted half of the R4 billion loan into equity.

Apart from Covid-19, the civil unrest in 2021 and flooding in KwaZulu-Natal earlier this year have compounded “weak consumer demand for general merchandise and an increasingly competitive operating environment”, Walmart said.

As part of its turnaround plan, the company plans to sell or close more of its non-core assets. While this will be crucial to the long-term strategy, it “will have a negative impact on the profit and loss of Massmart in the short term” and will require additional capital investment into the business, Walmart said.

The development of its e-commerce strategy will also require significant additional financial investment, the company said.

“The potential offer will enable Walmart to continue its overweight support as a long-term shareholder and allow eligible Massmart shareholders the opportunity to realise value now.

“With an expected inflow of foreign direct investment estimated at R6.4 billion, this potential offer, if finalised, represents a positive vote of confidence in South Africa by the world’s leading retailer,” Walmart said.

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Massmart has established an independent board to review the terms of the offer. The independent board is advised by PwC. Based on a preliminary report, the independent board has already considered the offer and conditions as “fair and reasonable”, and will recommend the offer to the board.

In addition, shareholders representing almost 25% of Massmart shares have been canvassed and support the offer.

Massmart CEO Mitch Slape will step down from his role at the end of the year, with Jonathan Molapo becoming the new head of the company. Molapo was previously CEO of Astron Energy before joining Massmart last year.

Source: News24

Massmart announces appointment of new CEO

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