HARARE – Retail group OK Zimbabwe has reported a sharp reversal in performance, posting a US$17.8 million loss for the six months to September, compared with a US$3.71 million profit recorded in the same period last year.
The deterioration was driven by a steep contraction in revenue, which fell 84% to US$28.26 million from US$177.43 million, as sales volumes plunged 83%. The group attributed the decline to persistent stock shortages and the closure of several stores, which significantly constrained its ability to trade at scale during the period under review.
In a trading update, the company said the recovery in operations remains fragile, with suppliers yet to fully restore normal trading terms. This is despite OK Zimbabwe having settled 50% of legacy supplier debts following a recent capital raise, which management had hoped would stabilise supply lines and improve product availability.
“While progress has been made in reducing arrears, supplier confidence has not been fully restored,” the group said, noting that limited access to credit continues to weigh on inventory levels and sales momentum.
Cost pressures also remained elevated, further eroding margins. During the six-month period, OK Zimbabwe incurred US$9.51 million in employee costs, alongside US$5.3 million in utilities and backup power expenses, reflecting the high cost of operating in an environment characterised by electricity shortages and rising input prices.
The results underscore the structural challenges facing Zimbabwe’s formal retail sector, including constrained consumer spending, foreign currency shortages, and high operating costs. Analysts say that until supplier terms normalise and store networks are fully operational, revenue recovery is likely to remain subdued.
Looking ahead, OK Zimbabwe said its focus remains on restoring stock availability, rationalising its store footprint, and improving operational efficiency. However, management cautioned that the pace of recovery will largely depend on broader macroeconomic stability and the restoration of supplier confidence.
The interim performance highlights the scale of the turnaround task confronting one of Zimbabwe’s oldest listed retailers as it seeks to return to profitability in a highly challenging trading environment.
