DIVERSIFIED group, TN Lifestyle Holdings, has announced plans to close over 10 outlets by end of next month as the group scales down operations to reduce operational costs, the company has said.
By Acting Business Editor
According to a statement issued by the group yesterday, TN will, with effect from today, shut down seven TN Harlequin, TN Grill and TN Mart branches across the country as depressed consumer demand hurt the business. Apart from winding down some of its operations, the group also announced plans to effect job cuts in a desperate bid to improve efficiency.
Group chief executive officer Tawanda Nyambirai said: “We have decided to close several branches throughout Zimbabwe in order to reduce operating costs. “The Lifestyle group employs 1 420 employees. The group cannot sustain these levels of staff costs. A decision has been made to retrench employees that are excess to the group’s requirements.
“Because of this sad development, staff morale is low . . . We would shorten the duration of the retrenchment exercise were it not for the fact that the Zimbabwe retrenchment laws are rated amongst the most complicated and most difficult in the world.”
The company, according to the statement, will close most branches in Harare, Bulawayo and other small towns. Last year Nyambirai told NewsDay that a sharp rise in rentals for retail properties against the backdrop of an underperforming economy had also affected performance of the business. While the group has been closing down some of its fast food outlets, competition on the other hand has been engaging on growing business.
The development comes barely a week after the country’s tax collector warned of more company closures and scaling down of operations. The Zimbabwe Revenue Authority (Zimra) has warned of more company closures, scaling down of operations and a subsequent decline in company tax as Treasury continues to operate under a tight fiscal space.
Treasury last year missed its revenue target for the year ending December 2013 by 8% on the back of underperformance of diamond revenue and massive company closures amid a relentless push by the civil service to increase the wage bill.
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