Walmart veteran brought in to halt Massmart’s slide

Earnings may drop as much as 50% in the first five months of the year compared with a year ago, Massmart said Thursday, when the company also named Walmart veteran Mitchell Slape as chief executive officer. The shares fell as much as 12.5% to their lowest intraday level in 10 years.

Walmart bought a majority stake in Johannesburg-based Massmart in 2011 for R16.5bn ($1.2bn) to tap into rising African consumer spending. Things haven't quite worked out that way. Massmart is contending with falling sales at some retail outlets amid a slowdown in the continent's most-industrialised economy and stubbornly high unemployment.

Now the US big-box giant is sending in Slape, 51, who has worked for Walmart in Japan, India, Mexico and the US. He'll be facing a challenging turnaround project at Massmart.

South African retailers have been struggling amid dire prospects for growth. Rising taxes, fuel costs and other bills alongside sluggish economic growth have dented consumer confidence, while unemployment in the continent's most industrialised economy remains stubbornly high. Walmart has also reported growing hurdles overseas, including in China, India and the UK.

Slape will move to Johannesburg when he has been granted a work permit, Massmart said in a statement on Thursday.