More trouble for embattled Kenyan supermarket chain

Financial ripples continue to assail one-time Kenyan retail behemoth Uchumi supermarket – with the latest seeing creditors raid an outlet and cart away goods worth millions.

Early Tuesday, auctioneers marched into the Moi Avenue branch in Mombasa and took off with merchandise to cover rent arrears estimated at Kenyan Sh12 million. 

As workers watched helplessly, auctioneers took away a variety of goods, including foodstuffs, clothes, shoes and vegetables, as police stood guard.

The action followed a court order issued by chief magistrate Julius Nang’ea on April 5, 2018.

Makini Auctioneers official Tom Nyandika said they were taking goods to a warehouse awaiting further orders from the court.

“The rent is long overdue. They were given a notice but they did not pay and the rent arrears are coming up to Sh12 million,” he said.

The supermarket chain is still remembered for its foray into and unceremonious exit from Tanzanian and Ugandan markets in 2015, which left a lot of local suppliers in the lurch.

Then-CEO Julius Kipng'etich claimed these regional markets generated negligible revenue yet accounted for a disproportionate share of the group’s costs.

 “Our outlets in Uganda and Tanzania make up only 4.75 per cent of our operations yet they account for over 25 per cent of our operating costs,” he said.

“The two subsidiaries have not made any profits over the last five years, which means they have been draining the parent operations.”

Mr Kipng'etich has since been replaced by his long-time protégé, Mohamed Mohamed.

For the newish acting Chief Executive, who has been driving a home-grown turnaround strategy since his appointment in December last year, the Moi Avenue raid is likely an unfortunate bump in the road.

Mr Mohamed had promised to settle all the debts the retail chain has with suppliers and landlords within the first quarter of 2018.

“It will take time for all the variables to click for us to say we are on a sure footing….We intend to ensure we are paying our suppliers and rent on time,” he told The Daily Nation in an exclusive interview in December.