Massmart has confirmed to MyBroadband that it has no plans to shut down any of its Game stores.
This follow’s the recent announcement that Massmart has entered into consultation over the cutting of 1,800 Game jobs.
Alongside this, Game also said there would be no impact on its product range or on the ability of these stores to service former Dion Wired customers.
“We are determined to restore [Game] to full profitability,” said Massmart.
“We have already implemented a number of actions that have begun to deliver value and that are improving our financial performance.”
Massmart said that these actions have included the following:
- Improving assortment coherence.
- Increasing Massmart group private brand exposure in Game, for example Powerworx.
- Removing our fresh proposition.
- Implementing new categories, such as clothing essentials.
- Aggressively reducing Cost of Goods Sold (COGS).
Financial struggles at Game
Massmart said that there are two causes behind the possible job cuts at Game.
Firstly, it said that Game had performed poorly over the 2019 financial year.
This was compounded by the negative impact of the COVID-19 trading restrictions on its in-store sales.
“As a result, we are proposing a more resilient store operating model that will contribute to improving the performance of our Game stores in South Africa,” said Massmart.
“To this end, the proposal is focussed upon store role responsibilities and will not result in the closure of any Game stores.”
1,800 jobs could be cut
The 1,800 Game store employees that could be retrenched due to the implementation of this new store model comprise about 3% of Massmart’s total workforce.
However, Massmart said it aims to minimize potential job losses that might result from the consultation process.
“We recognise that this is an exceptionally difficult process, especially for those associates who are potentially affected,” said Massmart CEO Mitchell Slape.
“It goes without saying that we will approach the Section 189 consultations in a transparent and caring way that has the objective of exploring all possible options to avoid potential job losses.”
“It is, therefore, our preference to have the CCMA appoint a commissioner to facilitate the consultations to ensure an objective and fair process for all parties concerned,” Slape said.
Statement to shareholders
Massmart released a statement to shareholders informing them of the possibility of job cuts.
“The Massmart Group has recently completed an assessment of opportunities to improve our South African Game store efficiencies,” said Massmart.
“Massmart advises shareholders that the group has commenced, with respect to its Game stores in South Africa, a consultation process in terms of section 189 and section 189A of the Labour Relations Act 66 of 1995.”
“This process may potentially affect 1,800 employees in our Game stores in South Africa,” said Massmart.