- 26th June 2018
- Posted by: damian.shore
- Categories: SagaRetail News, Retail & Shopping Malls, Corporate news, Kenya
Now that a proposed merger with rival Tuskys has fallen through, beleaguered Kenyan supermarket chain Nakumatt appears doomed. Having entered voluntary administration in January, 14 landlords recently moved to evict the retailer from their premises due to mounting rent arrears. This has left Nakumatt with less than ten outlets (down from a peak of more than 60) and its international expansion plans (it once boasted stores in Tanzania, Uganda and Rwanda) in tatters.
Weighed down by debts of around KES30 billion (US$300 million), eyebrows were raised when it was revealed in March that Nakumatt had “lost” some KES18 billion worth of stock during 2017 – the equivalent of more than a third of its sales during the same period (KES52.2 billion). In this context, the term “shrinkage” hardly seems appropriate – outright looting appears to have taken hold as the company´s outlook darkened.
Managing director Atul Shah maintains that the brand still has a future: “Nakumatt is coming back but in a small way. The plan is to open only seven branches in Nairobi.” But are creditors likely to buy into this rescue plan?
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