OK Zimbabwe, once the undisputed titan of the country’s retail landscape, is navigating a “Grand Challenge” that threatens its very existence as the group grapples with a staggering debt load and a near-total collapse in revenue.
New data from the retailer’s first creditor’s report revealed that total debt surged by 41.4% to reach US$37.4 million for the year ended February 28, 20261,2.
This mounting fiscal pressure has forced the group to close down 20 retail outlets across the country, a sharp increase from the 11 closures reported in November 2025, leaving the former giant with only 54 active stores to anchor its survival strategy.
The retailer’s descent into corporate rescue followed a year of desperate financial manoeuvring that failed to stabilise the ship.
In early 2025, the group informed its shareholders that it owed creditors US$26.48million,a figure it hoped to manage through a massive US$67.3 million liquidity plan.
This ambitious roadmap included a U$S20 million capital raise,property sales targeted at US$27.7 million, and US$19.6million in various banking facilities.
However, the reality on the ground proved far more punishing,as the group’s revenue began a precipitous decline that saw monthly sales crash from US$21.7 million in January 2024 to just US$1.3 million by January 20263.
The velocity of this revenue collapse—a 94% drop in just two years—has been attributed to a perfect storm of economic and internal factors.
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According to the sources, the retailer was battered by extreme exchange-rate volatility, a sharp decline in consumer spending power, and aggressive competition from the informal sector.
These external pressures were compounded by rising operating costs, specifically utilities and the heavy expense of running generators, alongside what have been described as poor managerial decisions.
As cash flow evaporated, the group’s attempt to use its capital raise to appease suppliers met with significant resistance.
From the funds raised, 50% was allocated to the partial settlement of legacy trade debts, other creditors, and US$1.6 million in salary arrears.
Despite these payments, the supply chain remained paralysed.
Lead corporate rescue practitioner Bulisa Mbano noted in the creditor’s report that “suppliers were expected to deliver merchandise following the partial settlement of amounts owing to them, unfortunately, most of the suppliers did not supply at all. The ones that did supply, did so at very low levels.”
This breakdown in trust created a “vicious cycle” where empty shelves further eroded sales, leaving the group unable to generate the liquidity needed to clear remaining balances.
Mbano clarified the depth of the standoff, stating that “some suppliers agreed to resume supplies once 50% of their balances was paid, unfortunately, the suppliers did not subsequently supply OKZL and rather proceeded to demand for the remaining balances.”
The failure of property sales to meet targets added to the strain, while the group hoped for US27.7 million,only US$8.72 million was realised.
“The proceeds from the sales of the properties were utilised for working capital requirements, paying off bank loans and settling old supplier balances,” Mbano said.
Now operating under corporate rescue, the group is betting on a new, disciplined recovery plan to restore solvency.
The immediate objective involves securing a “working capital injection of approximately US$5,2 million to secure the buildings, negotiating structured financing arrangements with post commencement financiers and motivating a rights issue by shareholders.”
The plan also seeks to secure bank guarantee facility and overdraft facility from Ecobank Zimbabwe, finalise immovable assets disposal as per the board resolution dated May 30, 2025 and disposal of obsolete assets.”
Central to rebuilding supplier confidence is a new mechanism to ensure that sales proceeds are not swallowed by legacy obligations.
Mbano has moved to create a dedicated collection account, asserting that “all inflows into the account are strictly ring-fenced to protect the integrity of the funds and ensure they are applied solely for their intended purpose.”
To entice vendors back, the practitioner is offering a guarantee of priority repayment.
“Post-commencement creditors continue to support the business during the rescue period, with the assurance that in the event of liquidation their claims will be treated as preferred,” Mbano said.
“This affords them priority and entitlement to 100% repayment of all post-commencement debt owing.”
Reflecting on the scale of the challenge, Mbano sid “debts due and payable to creditors by OK Zimbabwe as at February 28, 2026 amountedto US$37,4 million,” but he maintained that the group has a viable path forward.
“OK Zimbabwe Limited is positioned for a successful turnaround because it is pursuing a structured, disciplined, and comprehensive recovery plan that addresses both short-term liquidity pressures and long-term business sustainability,” he said.
“The initiatives include taking decisive action to improve short-term liquidity and operational efficiency by strengthening financial controls and implementing cost cutting measures to preserve cash, establishing a reliable and transparent settlement mechanism that rebuilds supplier confidence through a ring-fenced dedicated collection account and publishing a restructuring plan that aims to strengthen the capital structure and restore solvency.”
For the 54 remaining stores, the hope is that once these funding structures are finalised, the empty shelves will finally be restocked, signalling the beginning of a genuine recovery.
