Another historical company under the hammer following intention to sell SOBO
* As a company we have been struggling with capital inadequacy for the past 8 years due to some serious capital losses
* I think People’s has failed miserably in all sectors. This is the final nail on the coffin — the shops will never resurrect as per say
* People’s management was backward, it was used to operating in an environment of no competition
* The reputation of People’s is bad, the buyer needs to rebrand. No customer wants to be associated with a backward brand
By Duncan Mlanjira
The announcement by Press Corporation Limited that it has sold off its subsidiary People’s chain of supermarkets — historically and nolstagically known as PTC — has been received with mixed reaction by the public.
Some have applauded the move while others are skeptical if the historical chain of markets can be resurrected from its death bed by the new owners — Tafika Holdings Limited, which is owned by South Africa-based Malawian Arson Malola.
For years now, People’s says it has been struggling to raise capital for smooth running of its operations, which led to closure of many of its stores across the country and in a statement to its employees, Chief Executive Officer, Ferdinand Mchacha said Tafika Holdings has acquired 100% of the shares from Press Corporation Limited.
Mchacha said the move is aimed at recapitalizing People’s to restore it to its former glory as well as expand its operation in the country and beyond the region.
“As a company we have been struggling with capital inadequacy for the past 8 years due to some serious capital losses that came about due to a number of factors including stock losses, shrinkage among others.
“Over the years there were so many of initiatives happening for partial recapitalization but we felt time had come that we needed to make a big capital injection through this recapitalization process,” Mchacha said.
The statement also assured staff members that there will be no retrenchment and job losses, saying the company will be expanding from 20 existing stores to about 200 in the next five years — hence creating more job opportunities.
“We are looking at expanding, so we are actually looking at employing more people and not reducing the existing number. Currently we got only about 20 stores in Blantyre, Lilongwe and Zomba.
“We are looking at opening stores in Mzuzu and all over the country. This whole recapitalization was done to save people’s jobs.”
The company will also not be rebranding to change its name and will maintain its other subsidiary of SPAR as well as Food Lovers stores.
PTC will be carrying out its recapitalization process for 5 years starting with restocking the stores, capacity building for its staff as well as upgrading some of its stores apart from opening new stores across the country and within the region.
Commenting on Facebook, Hardy Matapila expressed reservation, saying the move will not change anything.
“I think [People’s] has failed miserably in all sectors. This is the final nail on the coffin — the shops will never resurrect as per say.”
He hinted that most companies close due to stock loss, which by definition is stealing by employees.
Grecian Msiska was also of the opinion that “People’s is dead — it will not resurrect”, adding that management failed to compete with Shoprite even when “Shoprite had two shops only while they had close to 100 shops”.
“People’s management was backward, it was used to operating in an environment of no competition. How could such a giant be brought down just like that? It’s a shame.
“The reputation of People’s is bad, the buyer needs to rebrand. No customer wants to be associated with a backward brand, I see a few old people buying in the backward People’s. If you want to make money, please rebrand and repackage this thing.”
Joseph Mwaupina advised the new owners to guard against pilferage by members of staff, saying he should lay off all of them because the culture of stealing is too deeply embedded in them.
“Anthuwa daily kutuluka mu shop amakhala anyamula kenakake (every day the staff knock off from work after taking some of the stock for their home use)” and apart from top management, “it’s the staff in the shops that have made to go down. Next put up cameras in those shops.”
Ernest Chimfuka laughed it off that he doesn’t think the “staff can steal commodities to the point of bankrupting the whole People’s franchise” but Mwaupina maintained his stand, saying a friend of his once participated in an internal audit exercise.
“The report was bad. There were a lot of movements of goods at the warehouses without documentation, some goods could be sold to vendors in tons without knowledge of the company.”
Others indicated that the staff sold off the stock they allegedly stole to grocery shops, vendors or to friends with another commentator alleging that one lady friend boasted that they stopped spending on home use commodities.
Grecian Msiska attested that “the whole system is rotten — there are no controls, pilferage is rampant. I doubt if this thing will resurrect”.
Blessings wa Khanyepa reminisced that “Kandodo and PTC were the only reliable shops in past but now they are like kiosks” while Weston Kathamalo welcomed the new development, saying once one fails, they have to “pave way for others to try their luck”.
“I really like the move, it will create more jobs in the coming one or two years” with Leonard Philip Mahaya,,saying: “Finally, that’s a good decision — the struggle has been there for years.”
Febbie Kamphulusa Kanju said: “PTC inafika pomvetsa chisoni. Sad that it’s going but maybe this will bail them out” while Pilira Chikope bemoaned of lack of customer care that discouraged customers — preferring those who made the customer a king.
Adam Chirwa was also optimistic, saying: “Let’s see what sort of marketing strategies [Tafika Holdings Limited] can pursue in this difficult market.
“We have seen Sana taking over the market share, Shoprite also in the market share, then Spar shops and the walking vendors etc. It’s tough out there!”
Madimbo Joseph said: “Competition had been terrible in democratic Malawi. It is because of free market economy. PTC was the only trading or shopping centre in a single party Malawi.
“Being the only shopping centre, there was not alternate or choice but from PTC. They made a lot of money during Kamuzu era and lost it in Muluzi era. Now, with Shoprite, Game Stores, Spur — oooooh pole sana. Only the fittest will survive.”
On a lighter note, Richie Daka said “koma bread uja musampange compromise (please don’t compromise People’s bread). There is no better bread in Malawi which tastes better than the PTC bread.”
Last month, Castel Malawi announced that the French company has sold off Malawi’s historical company, Southern Bottlers Limited (SOBO) to Coca-Cola Beverages Limited, which a subsidiary to Coca-Cola Beverages Africa.
SOBO produces Coca-Cola, Fanta, Sprite, Cherry Plum, Cocopina, SOBO Squash and several others since time immemorial.
In acquiring Carsberg Malawi, Castel also bought SOBO subsidiary, Malawi Distillers Limited — producers of famous spirits such as Malawi Gin, Premier Brandy, Powers No.1 and others.
Source at the company hinted that their Staff Union were seeking a court injunction prohibiting final approval of the sale, that include that of the historical head office administration building at Makata Industrial Area in Blantyre that was advertised up for sale in September last year.
Castel Malawi had indicated that it had plans to build a state-of-the-art office complex — which will have all befitting facilities and also put on the hammer Mzuzu depot to be replaced with a new premises.
Sources within Castel had said then that the company has been selling a lot of its properties that include residences and staff guest houses across the country.