OK Zimbabwe losses mount, suppliers cut credit, stores struggle to stock

LIVINGSTONE MARUFU

It was bad.
It is worse.
It could get even worse before it gets better.

Once a flagship of Zimbabwe’s retail sector, OK Zimbabwe Limited is in crisis.

The group posted a US$25m loss for the year to March 31, 2025, as debt, supply chain disruptions, and frequent power outages cripple operations.

Management changes in February and a US$20m rights issue in July have done little to stabilize the business.

Stock shortages persist, suppliers demand upfront payments, and the group’s topline continues to tumble.

Chairman Herbert Nkala said:

“The group revenue declined by 52% to US$245m  compared to the prior year and against an average inflation rate of 15.21%. The decline is attributed to supply chain disruption, unstable exchange rates—especially in the second half of the year—liquidity crunch in the economy, and heightened competition from the informal sector compounded by exchange rate controls that distorted pricing.

Supply chain disruptions arose as the group failed to settle suppliers’ accounts on time, leading some to withhold deliveries and others to demand payment upfront. These challenges negatively impacted operational capacity.”

Nkala added:

“As a result of the factors highlighted, the group recorded a significant loss for the year of US$25m.”

Even with a 43.91% reduction in overheads, revenue dropped faster than costs. Fuel and repairs surged due to higher generator use amid ongoing power outages. Impairments of US$10.3m and negative cash flows forced capital expenditure down to US$0.9m.

“The introduction of the ZWG initially brought some stability but currency shortages triggered rapid depreciation mid-year, leading suppliers to demand US$ payments or shorten terms for ZWG invoices. Exchange rate controls distorted pricing, supply chain issues worsened, and declining sales, coupled with frequent power cuts, left the business in distress,” Nkala said.

The group aims to restore stability through restructuring, sale and leaseback of select properties, and investment in renewable energy.

“The board and management’s initial focus has been to stop the decline in performance and financial distress and to steer the business back to stability, profitability, and long-term sustainability,” Nkala said.