South Africa’s leading fashion retailer, Truworths, has pulled out of its Nigerian business due to high rentals and import restrictions, its chief executive said on Thursday.
“We were unable to operate the stores properly any longer because we were unable to send merchandise to the stores because there’s regulation preventing that,” Michael Mark told Reuters in telephone interview.
Michael Mark, CEO of Truworths, also said that the company struggled to get stock into Nigeria and cash out of the country. Truworths’ dollar rental bill also soared as the rand weakened against the U.S. currency
“The regulations were making it extraordinarily difficult to get stock into the stores, we couldn’t get money out, so there was no point any longer,” Mark said. “Obviously everyone gets excited about Nigeria because of its size, but I think they’ve taken an incredible strain with internal problems in the country politically and then there are the issues with their oil.”
This is not the first South African company that has struggled to operate in Nigeria. Woolworth had to close its stores in 2013 because of high rental costs, duties and difficulties getting stock into stores.
“It’s a tough market, with high rental expenses and I felt you needed to get big or get out,” Ian Moir, the chief executive officer of retailer Woolworths, told reporters in Johannesburg on Tuesday. “We made the right call, we didn’t see things really changing there for the next 10 years.”
