Table of Contents
Key Points:
- RSN will shut down its Wuse store in Novare Wuse Central Mall on June 30, 2024, citing financial challenges.
- This underscores widespread operational difficulties, with other firms like Diageo and Kimberly Clark also exiting the market.
- It aligns with broader shifts in Nigeria’s retail sector amid economic adversity and strategic reevaluations.
Retail Supermarkets Nigeria Limited (RSN), the operator of the country’s leading supermarket chain, Shoprite Nigeria, has announced plans to close its Wuse, Abuja mall at the end of June.
The recent decision by RSN, which is owned by Ketron Investment Limited, an investment group led by Nigerian businessman Tayo Amusan, comes amid a challenging macroeconomic environment, diminished profit margins, and rising operating costs.
RSN reviews finances, notifies vendors
In a circular signed by Chief Executive Officer Folakemi Fadahunsi, RSN stated that the Wuse store in Novare Wuse Central Mall would cease operations on June 30, 2024. The decision follows a detailed review of the store’s financial performance.
“We regret to inform you that as of June 30, 2024, Retail Supermarkets Nigeria Limited will be closing its Wuse Store located in Novare Wuse Central Mall, Abuja,” the statement read. “This decision has been made after a thorough evaluation of the store’s financial situation and the current business climate. We believe this is the best course of action for our organization’s long-term growth.”
RSN also notified vendors that their services would no longer be required at the Wuse location. The company will review its financial records over the next 60 days and contact vendors regarding any outstanding payments and a suitable payment schedule.
Economic challenges impacting businesses
The closure of Shoprite’s Abuja store highlights the ongoing struggles faced by businesses in Nigeria. Shoprite Nigeria’s total assets as of June 2020 stood at $125 million, while its total liabilities amounted to $140 million. The country’s challenging macroeconomic environment has led to diminished profit margins and increased operational costs for many companies.
This month, British multinational Diageo Plc announced plans to sell its 58.02 percent stake in Guinness Nigeria Plc. Additionally, two years after investing $100 million, diaper manufacturer Kimberly Clark announced the imminent shutdown of its production facility in Lagos.
Last December, Procter & Gamble (P&G) declared it was winding down its on-ground presence in Nigeria, opting to import products instead due to the challenging business environment and difficulties in creating US dollar value.
Tayo Amusan’s expanding business empire
RSN, acquired by Ketron Investment three years ago from South Africa’s Shoprite Holdings, is part of a growing business empire led by Nigerian businessman Tayo Amusan.
Ketron Investment, is one of the wholly-owned subsidiary of Persianas Group, a leading group which focuses on developing luxury residential, retail, entertainment, and hospitality centers, as well as commercial developments in Nigeria.
In February, Persianas Group, in collaboration with the Nigerian Sovereign Investment Authority, launched a groundbreaking $100-million project for a 12,000-capacity arena in Victoria Island, Lagos. The state-of-the-art facility, dubbed “The Arena,” aims to become a significant center for entertainment and sports in Nigeria.
