OK Zimbabwe's former chief executive officer, Mr Willard Zireva, has bounced back to lead the retail group and lift it from its current operational challenges, which have seen the company closing five branches.
Mr Zireva led the company as CEO from 2001 until his retirement in 2017 and comes back when the 83-year-old retailer, the country's largest by store numbers, has embarked on a business review and restructuring aimed at enhancing operational efficiency and driving sustainable growth in a dynamic market.
OK Zimbabwe, in a statement, said the conclusion of voluntary separation saw agreements with three top executives: chief executive Mr Maxen Phillip Karombo, chief financial officer Mr Phillimon Mushosho, and supply chain director Mr Knox Mupaya.
This followed a period when the giant retailer struggled to restock its branches across the country citing a tough trading environment amid a burgeoning debt burden.
However, the Reserve Bank has suggested most challenges facing retailers have nothing to do with the operating environment, but the affected companies' questionable management decisions.
At OK Zimbabwe, the new management also includes Mr Alex Edgar Siyavora, another former CEO of the group, who comes back as chief financial officer and Mr Muzvidzwa Richard Chingaira who takes over as new supply chain director.
The appointments are with immediate effect, with the new leadership expected to stabilise operations and implement a strategic recovery plan over the next six months while the company searches for permanent executive replacements.
"The board would like to acknowledge the outgoing executive team for their service through this challenging period and to welcome back the team entrusted with stabilising and turning the business around," OK Zimbabwe said in the statement yesterday.
In a recent trading update, OK Zimbabwe said it had begun restocking shops with support from supplier partners and financial institutions that continue to assist with short-term funding facilities. In addition, the business said new alternative procurement models had been put in place, including but not limited to, a structured stock supply arrangement with a third party for supplier assurance purposes as the business works to restore critical supply relationships with both local and foreign suppliers.
The retail group experienced episodes of stockouts during the last three months of last year which continued into the first two months of this year.
"This was evidenced by daily availability levels of around 50 percent of normal stocking levels, and these stockouts arose from restricted supplies from manufacturers and distributors," the company said in a trading update for the quarter-ended December 31, 2024.
The group said it was confident of restoring normal stocking levels before the end of the current financial year.
During the period under review, volumes decreased by 36 percent compared to the same period last year. However, on a year-to-date basis, the group recorded volume growth of 10 percent over the same period.
The company noted that the reduction in volumes recorded during the quarter translated to a decline in revenue of 36 percent as compared to the prior period.
OK said it had outstanding and overdue creditors' balances, which were predominantly denominated in US dollars against a backdrop of low US dollar sales, at times reaching as low as 20 percent of sales revenue.
The company has claimed the low stocking levels were a direct manifestation of sub-economic pricing arising from exchange rate distortions and suppliers demanding foreign currency in invoicing to cover their operational and raw material needs.
"Suppliers continued to insist on shorter trading terms and, in some cases, prepayments for supplies invoiced in local currency. This exerted pressure on the business' working capital and necessitated the need to access short-term funding," it said.
"To mitigate against rising operating costs, the group resolved to close four branches in Glen Norah, Kuwadzana 5, Chitungwiza Town Centre, and Robson Manyika Street, all in Harare."
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A fifth branch was closed in Bulawayo's Entumbane high density suburb.
The business said a review and consideration of branches saddled with the stifling impact of unsustainable operating cost structures and costly licensing requirements was in progress.
The Confederation of Zimbabwe Retailers (CZR) has been pressing for action to ease challenges facing retailers.
The sector, according to CZR, is the heartbeat of Zimbabwe's economy, ensuring food security, employment, and revenue collection.
Presenting a case study on the retail sector to the Tripartite Negotiating Forum Economic Cluster, CZR president Mr Denford Mutashu, represented by acting CEO Mr Innocent Marimo, argued that exchange rate distortions, rising informality, excessive taxation, among other issues have created an environment where compliance is punished while informality flourishes.
"If urgent interventions are not implemented, we risk a complete collapse of the formal retail sector, leading to mass job losses, declining tax revenues, and further economic instability," he said.
