ECONOMISTS this week described the leadership shake-up at struggling retail giant OK Zimbabwe as a critical step towards restoring the company’s viability.
However, they cautioned that broader economic challenges could impede a swift recovery.
The retail group underwent an executive reshuffle last week, signalling a strategic realignment aimed at addressing its recent underperformance.
Zimbabwe’s largest supermarket chain announced the departure of key executives and the return of previous leadership figures in an effort to stabilise operations.
The restructuring saw the removal of chief executive officer Maxen Karombo, chief financial officer Phillimon Mushosho and supply chain director Knox Mupaya.
Former CEO Willard Zireva was reappointed to lead the company, while Alex Edgar Siyavora returned as chief financial officer and Muzvidzwa Chingaira assumed the role of supply chain director.
Zireva had retired from OK in March 2017 after serving as CEO since 2001. Siyavora, who joined the company the same year as financial director, succeeded Zireva as CEO in 2017.
Economist Stevenson Dhlamini told the Zimbabwe Independent that the leadership changes reflect a strategic shift within the company, emphasising the need for fresh perspectives to drive a turnaround.
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“The change of OK Zimbabwe executive is an implied expression of a strategic realignment of the leadership,” Dhlamini said.
“It implies that the company has realised that to have a turnaround strategy, there is a need for fresh insights in leadership to give a new strategy.
“This move is expected to transform the company’s performance positively,” he said.
He added that government intervention in the form of supportive policies is essential to ensuring the sustainability of the retailer’s recovery efforts.
“The problems cited by the retail giant that led to its underperformance were chiefly exchange rate movements, declining consumer demand, value chain disruptions, and rising inflation,” Dhlamini said.
“I think that the change in the executive is a necessary move to initiate a turnaround of the retail giant. However, it is not a panacea to the company’s challenges.
“There is a need for the government to come up with supportive policies to ensure the sustainability of the turnaround strategies.”
These challenges have led to the closure of several OK branches and significant stock shortages, further deepening the company’s difficulties.
In its trading update for the quarter ended December 31, 2024, the company reported that volatility in the local currency had tripled its United States dollar commitments, leaving it with debts of US$30,34 million, primarily owed to suppliers.
Development economist Chenayi Mutambasere from the Africa Centre for Economic Justice expressed concerns about the broader economic environment’s impact on the company’s recovery, despite the experience of the new management team.
“While the new management team brings experience, the broader economic environment characterised by inadequate infrastructure and a weak domestic market poses significant hurdles to a swift turnaround,” Mutambasere said.
“Therefore, expecting a rapid revival of the retail giant may be overly optimistic.
“OK’s challenges include a 36% decline in sales volumes for the third quarter ending December 31, 2024, attributed to economic factors such as currency devaluation, liquidity shortages, and power outages.
“These issues led to the closure of several branches and significant stock shortages.”
The leadership changes at OK come at a time when the country’s retail sector is facing severe headwinds.
Other major players, including N Richards, Spar Zimbabwe and Choppies, have also been forced to scale down operations due to economic instability.
