Massmart says it has enough funding to weather lockdown
JOHANNESBURG - South African retailer Massmart said on Monday it was confident it had sufficient funding in place to weather a 21-day nationwide lockdown but said it was too soon to estimate the financial impact of the coronavirus outbreak.
The lockdown, which began last Thursday, restricts South Africans to their homes for most activities including exercise, only permitting them to go out to buy food or for health emergencies.
“With the support of our majority shareholder, Walmart , we have concluded constructive discussions with our funders and are satisfied that we have sufficient funding in place during the lockdown period,” the retailer said in a statement.
But it said the high level of uncertainty and unpredictable outcomes of the disease “could materially impact the results of the group negatively and the assumptions applied in our assessment of provisions and impairment.”
Its Makro, Wholesale Cash & Carry stores, Shield Buying Group, Game and Cambridge Food stores would trade in basic and essential goods during the lockdown period, in line with the South African government measures, while its online platforms would also process and fulfill basic and essential orders.
The closure of South Africa’s borders has caused some disruption in the supply chain to its stores in other countries, it said, which account for around 10 percent of group sales.
The retailer said that those stores have enough safety stock to be able to meet supply needs in the immediate term, after which they would be dependent on existing local suppliers.Reuters