The management of Uchumi supermarkets has been locked out of its head offices Uchumi Supermarket in Nairobi’s Industrial Area over rent arrears.
The landlord, the Kenya National Trading Corporation (KNTC), locked the premises on October 2 and deployed a handful of private to ensure the staff at Uchumi does not access the premises over the rent arrears, which reportedly ran into millions.
Uchumi had been closing down various branches both within and out of the country in what the management said was part of it’s “cost management strategy, necessitated by a need to cut losses and need to survive the turbulent times”.
Uchumi Hyper branch in Sarit center, which has been operating over the last 30 years, became the latest branch to be shut down in February after the capital center one in January.
The cash-strapped retailer owes creditors billions of shillings in debts. Most of the creditors have moved to court seeking the auctioning of the remaining assets to recover their cash.
Among the creditors is Githunguri Dairy has applied for the winding up of Uchumi brand in a desperate move to have it paid a total of 44.8 million shillings in debts.
Chief Executive Mohammed Mohammed asked the creditors, suppliers and other stakeholders to be a bit more patient saying the recovery plan, which includes franchising model, digital strategies as well as the sale of assets, were bearing tangible results.
The Franchise Business Model is being piloted at the Uchumi Nairobi West Branch. The franchising model is aimed at offering private and mostly small supermarkets the opportunity to trade under its brand name.
In February Uchumi revealed that its net loss for the half year ended Dec 2017 widened to $8.92 million from $5.47 million in 2016, due to a sharp drop in sales.