Retail Giant OK Zimbabwe Shuts Down Five Branches
OK Zimbabwe, the country’s largest retailer by store numbers, has shut down five branches due to a challenging trading environment, reported Business Weekly.
However, critics point to several factors behind the closures, including a bloated management structure with at least nine directors and over 30 senior executives, all with luxury vehicles and high perks.
Questions have been raised about decisions made by the company’s leadership, such as multiple land acquisitions and dividend declarations, which have reportedly tied up cash or misallocated funds in recent years.
In addition, OK has faced difficulties restocking, with many outlets experiencing empty shelves, particularly in food products. Suppliers are reportedly unwilling to provide goods on credit or in local currency.
The company is also struggling with US$17 million and ZiG537 million in outstanding payments to suppliers, some of whom have withheld supplies despite part payments.
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In an internal memo, OK announced plans to cut its workforce, closing five outlets—Robson Manyika, Glen Norah, Kuwadzana Express, Mbare (all in Harare), and Chitungwiza Town Centre, as well as Entumbane in Bulawayo. A sixth branch is scheduled to close in March.
The closures will result in job losses, primarily targeting low-level workers, with severance pay set at one month’s salary for every year worked, along with three months’ notice pay and payment for unused leave.
The branches being closed are among those making losses or operating from rented spaces. OK operates 72 branches across Zimbabwe.
A company executive, who wished to remain anonymous, told Business Weekly that OK’s troubles are due to currency and economic issues in the US dollar-dominated economy.
The retailer’s situation worsened after receiving goods on credit in US dollars, which they now struggle to pay off due to cash flow issues.
Despite the introduction of the Zimbabwe Gold (ZiG) in April 2024, which stabilized the local currency, it hasn’t improved OK’s fortunes.
The retailer also faces intense competition from the informal sector, where suppliers prefer cash transactions in US dollars, allowing informal traders to offer lower prices due to fewer regulatory burdens and tax obligations.
Award-winning journalist Hopewell Chin’ono, citing industry insiders, said that six more OK branches will be closing soon. He added:
These closures bring unemployment not only to OK Zimbabwe but also to downstream and upstream industries.
Downstream industries are businesses that rely on OK Zimbabwe to sell their products, such as farmers, suppliers, and manufacturers of goods stocked in the supermarkets.
Upstream industries are businesses that provide logistics like truckers that moved goods to OK Zimbabwe, packaging and maintenance service providers.
