Spar CEO’s exit clouds turnaround hopes

Trading on JSE hadn’t even started when it was announced that Angelo Swartz had decided to step away from what is arguably one of the toughest jobs in the South African retail sector – CEO of Spar. But, as markets opened, rattled investors dumped the stock, sending it to a record low on fears that yet another leadership change would set back the group’s fragile recovery.

Friday morning’s SENS release was followed hours later by another notice from Spar to its shareholders that the company will release its trading update for the 18 weeks through January today, likely adding to investor jitters. The stock closed 7.3% down at R83.89, while the shares of rivals like Pick n Pay, Shoprite and Woolworths ended the day little changed.

The equivalent of a corporate suicide note emerged during the day, with Swartz issuing a statement to the “Spar Family” in which he essentially blames himself for the lack of progress the group has made in recovering its margins and says he felt compelled to quit. Swartz, whose resignation takes effect at the end of this month and will be followed by a three-month handover period, seems intent on clearing anyone else of responsibility for the group’s current position.

In the letter, he explains he would like to avoid the speculation that often follows the sudden departure of a senior executive. He refers to the exceptionally challenging past five years and the necessity of focusing on stabilising the group and recovering its performance levels. While much has been achieved on the stabilisation front, Swartz says the recovery still has some way to go.

Style unsuited to swift change

Then, in a move that is as remarkable as it is rare for a top executive, he takes responsibility for the lack of progress on the recovery front. “I have spent some time reflecting on where the business is going and the momentum required for the next phase,” writes Swartz. “The speed of recovery has simply not happened at the pace that is required, and it has become apparent to me over the last few months that my leadership style, in some ways, will not enable the pace of change necessary for the group to recover its margins in South Africa or to enable our retailers to compete in an increasingly competitive environment.”

And so, because he loves the Spar brand, its people and its retailers, Swartz says he quit so that the group could “reach its potential and fly”.

It’s difficult to imagine how much faster Swartz believed changes could have been made. During his tenure as CEO, the group has overhauled the board and top management, disposed of problematic international operations – at a hefty loss – and has almost recovered from a badly managed and costly roll-out of the SAP system in KwaZulu-Natal. While responsibility ultimately rests with the CEO, it’s worth noting that most of the challenges Swartz faced were created by the former leadership team.

Having to deal with challenges on so many fronts soaked up management time and financial resources, leaving the group poorly equipped to grow or even retain market share in its all-important home territory. 

As one analyst remarked, “Spar has lost market share to Checkers Sixty60 that they probably won’t ever get back”. He told Currency the group was certainly not “out of the woods” yet and that it seemed ill-advised to extend into different formats and categories at this stage.

Negative signal on performance

Swartz’s departure means there is now no one in the top tier of management with operational retail experience and familiarity with the independent retailer system underpinning Spar. Swartz, who had been CEO since October 2023 and with the group for 19 years, will be replaced by chief financial officer Reeza Isaacs, who held the role as group finance director at Woolworths during much of the controversial period when Ian Moir was CEO. Isaacs, who joined the company in November 2024, will be Spar’s fifth CEO in six years, a period marked by considerable turbulence.

In a note to clients, Avior Capital Markets analyst Michael de Nobrega said he viewed the leadership transition, ahead of a trading update, as a negative signal on underlying performance. 

“The change follows a period in which Spar priced competitively through November and December 2025 relative to peers, suggesting trading conditions have been more challenging than previously signalled.”

In the SENS statement announcing Swartz’s departure, chair Mike Bosman thanked him for his leadership and long-standing service at Spar. “He has led the group with commitment and integrity during a period of significant complexity and change,” said Bosman.

He added that the business is positioned to build on the progress achieved “and to accelerate disciplined execution of its strategic priorities” – confirming the group’s strategic direction remained unchanged: strengthen performance in Southern Africa, improve margin resilience, advance balance sheet deleveraging, and simplify the group’s portfolio.

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