Furnmart , the Botswana Stock Exchange (BSE) listed company which also trades in Zambia as Home Corp has announced that it is closing its loss making businesses in Zambia, a move that will see around 350 Zambians losing their jobs.
Furnmart has decided to close down its operations in Zambia following poor performance in that country.
The Zambian economy has been under duress following the fall in commodity prices, which affected the price of copper, its principal export.
The decision by management of Furnmart to close down the Zambian operations comes as little surprise as the Botswana based company has had concerns about its future in Zambia.
“Management would like to bring to the attention of shareholders that the publication of abridged audited consolidated financial statements will be delayed in view of the decision to wind up operations in Zambia which is having an impact on the finalisation of the results. The Company commenced the winding up of the Zambian operations on the 1st November 2016.
Management is confident that this will have a positive impact on future profitability,” said Tobias Louis John Mynhardt, the group’s deputy chairman and also the Managing Director of Cash Bazaar Holdings.
Furthermore, the group’s performance for the financial year ended 31 July 2015 recorded profit before tax which was 18.6% lower than the prior year mainly as a result of lower gross profit margins and higher operating expenses.
“The difficult trading conditions in the region and the currency fluctuations have had an impact on these results. However, management believes that the fundamentals of our respective business units are sound and that these businesses are well positioned to take advantage of future economic improvement. The Zambian business unit remains a challenge. The Group’s Home Corp model in South Africa also requires refinement,” the group said in a management analysis accompanying the interim results.
Furnmart Limited retails domestic furniture and electrical appliances through its network of stores in Botswana, South Africa, Namibia and Zambia.
And some of the workers interviewed have expressed concern that management at the entities have not given them any guarantee of receiving their terminal benefits.
One of the affected employees complained that the company has since engaged external security at the premises at Manda Hill and the sister company Furnmart operating as Home Corps in other towns across the country.
“They have said they will give us our terminal benefits by November month end, but our fear is that Home Corp have already put external security at their premises including the warehouse, which means they could be leaving anytime, maybe even before they pay us our dues,” he said.
He said the company management have complained of high rentals paid in US dollars which have become too high for the business with the soaring exchange rate against the Kwacha.