Dis-chem has lost R1.9 billion in value since a leaked letter from CEO Ivan Saltzman revealed a moratorium on employing or promoting white people.
Despite Dis-chem backtracking from their initial hiring strategy, it appears that the damaged had already been done.
Solidarity CEO Dirk Hermann published the letter on Twitter on 13 October, causing backlash against Dis-chem with growing calls for a boycott against the pharmacy chain.
A number of high -profile South Africans promised to never set foot in Dis-Chem again following its strategy of not hiring white people, in order to comply with BEEE laws.
Steve Hofmeyr made headlines on Monday, when he posted his last picture after collecting his prescription from the pharmaceutical giant.
The company initially stuck to its ban on promoting or hiring white people, apologising fir the tone which had been used in the letter but not its intent.
“We stand by the unequivocal imperative to continue our transformation journey. Equality, diversity, and inclusivity are important throughout Dis-Chem,” it said.
However, following the loss of close to R2 billion and the threat od legal action by Solidarity, Dis-Chem backtracked on its moratorium.
In a statement, the company said there is “simply no ban on employing and promoting white individuals”.
Rui Morais, the Dis-Chem CEO confirmed that sales declined after the letter from Saltzman went public and caused a storm on social media.
“We have seen our growth trend reverse from 17 October to 24 October when looking at daily sales numbers following leaking of the memo,” he said.
On November 2, Dis-Chem released positive results of the half-year end in which was captured until August. However, during Dis-Chem’s results presentation it became clear that the company was not doing well.
Dis-Chem’s share price fell by almost 7% over the last month. When compared to Clicks over the same period, Clicks had a 5% increase.
The impact that the letter had on Dis-Chem is difficult to measure but it could be estimated to be around R1.87 billion.
Source: Daily Investor, The South African, image from Twitter: @Sandile_Panther