• OK Zimbabwe has already closed 11 loss-making outlets and will shut another 3, reducing the network to 62 strategic locations
• Despite raising the full US$20 million via rights offer, revenue remains below break-even due to delayed US$10.5 million property sales and tight supplier credit terms
• Operating costs slashed by 35% already, with a further 15% reduction targeted by December 2025

Harare- Retail giant, OK Zimbabwe Limited has released a crucial market update, providing shareholders and stakeholders with a transparent view of its ongoing battle to return to financial health. Following cautionary statements first issued on 2 April 2025 and repeated in May and June, the company’s audited results for the year ended 31 March 2025, published on 6 November 2025, confirmed the severity of the challenges that began in 2024 and persisted into the current year.

The Group had been losing money and faced a US$30.5 million funding gap that threatened its ability to continue operating normally. An interim management team, made up of former OK Zimbabwe executives, was brought in after the separation from previous leadership. Their mandate has been to stabilise the business and execute a comprehensive turnaround plan.

“The interim Management team engaged with all suppliers to agree on amounts owing as at the end of February 2025 and put in place a settlement plan from the funds raised by the Company and from operations,” the group said.

While meaningful progress has been achieved in several areas, the company remains in a delicate position, particularly due to slower-than-expected property sales that are critical to restoring liquidity. A major milestone was reached when shareholders overwhelmingly supported a US$30.5 million capital-raising initiative at an Extraordinary General Meeting on 17 July 2025.

The package consisted of a US$20 million renounceable rights offer and US$10.5 million from the sale of non-core freehold properties. The rights offer was fully subscribed, demonstrating strong investor confidence and injecting US$20 million into the business.

Unfortunately, the property disposals have taken far longer than planned. Sale agreements on two properties are on the verge of being signed, offers on three others are under active consideration, and efforts to sell the remaining assets continue.

The interim team has worked hard to rebuild relationships with suppliers by agreeing on outstanding balances as of February 2025 and establishing repayment schedules using both operational cash and the newly raised capital. Suppliers have cooperated by accepting partial settlements in return for resuming deliveries, but the short credit terms currently in place have prevented the company from building sufficient stock levels ahead of the important summer trading season.

To stem losses and create a leaner, more viable operation, the Group has taken decisive action on its store portfolio. Eleven underperforming outlets have already been closed, including the three Food Lover’s Market branches whose franchise was not renewed. Three additional closures are in progress, leaving a focused network of 62 well-located stores.

Two strategic relocations are also underway: the Bon Marché store at Chisipite will move into a larger, modern premises as part of the shopping centre’s redevelopment, while a significantly bigger store is being prepared at Makoni Shopping Centre to replace the current undersized branch.

Cost-cutting has been aggressive. Head-office and support staff numbers have been reduced in line with the smaller store footprint, operating costs have already fallen by 35%, and a further 15% reduction is targeted by December 2025.

The loss-making pharmacy division has been shut down completely. Governance changes are also on the horizon. Shareholders approved the reconstitution of the Board at the July EGM, and the selection of new directors is in its final stages, pending regulatory clearance.

An announcement will follow shortly after the upcoming Annual General Meeting. The interim management team will remain in place until operations return to normal levels, after which a structured handover to permanent leadership will take place.

Looking ahead, management acknowledges that revenue remains below break-even, primarily because of limited product availability caused by ongoing liquidity constraints. The delay in property sales has been the biggest bottleneck, but confidence is growing that several transactions will conclude soon, releasing much-needed cash to replenish stocks and drive sales. Staff training programmes, with a strong emphasis on customer service, are being rolled out across the network to help the company compete more effectively for shopper loyalty.

Despite the difficulties, the tone from the Board and management is one of cautious optimism. With solid shareholder backing and a clear restructuring roadmap in motion, OK Zimbabwe believes it is on the path to recovery. The coming weeks and months, particularly the successful conclusion of the property sales, will be pivotal in determining how quickly the retailer can return to financial stability and reclaim its position as one of Zimbabwe’s leading retail names.

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