Massmart closes 23 Dion Wired stores in South Africa

Walmart-owned Massmart has announced in a notice to shareholders that 23 Dion Wired stores will stop trading from March 19 2020. It will still decide whether it will close 11 non-performing Masscash stores, the notice read.

The announcement comes following a previous statement issued on 13 January 2020, that the retailer would enter into a S189 consultation process, in terms of the Labour Relations Act.

“Since 13 January 2020, management have consulted extensively with the affected employees; organised labour and other relevant stakeholders under the guidance of the Commission for Conciliation, Mediation and Arbitration and all options/alternatives in respect of the potential closure of the affected stores have been exhausted,” Massmart said. The board has thus taken a decision to close the non-performing stores.

The company said it is in talks with unions, to mitigate the amount of job losses – possibly deploying some of the Dion workers to vacant roles within the Massmart Group, “where practical and reasonable”.

Dion Stores was founded in 1970 by Dion Friedland, an entrepreneur who had already cut his teeth – and made his fortune – with a chain of furniture and appliance stores called Rave at the age of 25.

In 1990, the Massmart group was created around six Makro stores, and in 1993 it acquired what was then a group of 20 Dion department stores. Two decades later, in 2011, Walmart took control of Massmart as part of an expansion strategy that had it eyeing the African continent.

Massmart saw its profits plunge by R1.73bn ($99m) in 2019, due to disastrous trading at Game and DionWired, and in the division that houses Cambridge Food and its Jumbo and Rhino store brands.

But Builders Warehouse and Makro continued to make decent money for the Walmart-owned group.