Spar is making significant moves to address its towering R9-billion debt by selling its Pinetown head office and other non-essential assets. In addition, the retail giant is considering leasing its fleet and divesting some of its corporate-owned stores to improve its financial standing.
The financial strain Spar faces is largely attributed to an unsuccessful investment in Poland. This venture ended in the retailer incurring a R185-million loss to sell off its operations. Moreover, an additional R2.7-billion was required to recapitalize the business before exiting the market entirely.
To manage its debt burden, Spar secured a R2-billion bridge loan from South African lenders. This critical injection of funds aims to stabilize the group’s financial position as it implements its broader recovery strategy.
Adding to its woes, Spar suffered a R1.6-billion loss following the unsuccessful implementation of a new SAP system at its KwaZulu-Natal distribution centre. This operational failure significantly impacted the group’s performance, further compounding its financial difficulties.
Despite these challenges, Spar’s leadership remains hopeful about the company’s prospects. The management is focused on future growth and achieving greater operational efficiency, with steps being taken to restore the retailer’s stability.
“These efforts reflect a broader strategy to streamline operations and ensure the long-term sustainability of the business,” said a company representative.
