Kenya’s Nakumatt, once East Africa’s top retailer, files for administration

Kenya’s Nakumatt has filed for administration after a slew of petitions from creditors owed millions of dollars by a company that started life more than 25 years ago as a small Rift Valley bed shop and became East Africa’s biggest supermarket chain.

One source close to the company said Nakumatt, whose flagship Nairobi store was destroyed in the 2013 Westgate attack by Somali militants, said it owed creditors including landlords and suppliers as much as 20 billion shillings ($193 million).

In January, the managing director of the chain, Atul Shah, told Reuters the debt then stood at $150 million.

By comparison the privately-owned company, which employs around 4,000 people, had assets of just 2 billion shillings, the source said. Nakumatt’s main rivals are local unlisted firms and French retailer Carrefour, which entered the Kenyan market last year.

More and more Nakumatt creditors have gone to court in recent months seeking to wind up the business due to non-payment of debts.

A group of 19 landlords who have rented out space to Nakumatt outlets have sued the company over rent arrears of 600 million shillings, the Business Daily newspaper reported.

“The Nakumatt directors are optimistic that the court will make the administration order in relation to Nakumatt, as the order will enable Nakumatt achieve a better outcome for its creditors,” the company said in a statement.

If the order is granted, it will allow Nakumatt to be maintained as a going concern by a court-mandated administrator, the company added.

The source close to Nakumatt said the chain needed about a year under administration to pay off its debts and could then emerge as a viable, leaner chain with 10-20 stores.

At its height, the company, which began life as the Nakuru Mattresses store, had more than 60 outlets across Kenya, Uganda, Tanzania and Rwanda. Large bronze statues of its elephant mascot stood outside store entrances, the trunks rubbed shiny by shoppers’ children.

But over the past year its financial woes have led to empty shelves and store closures.

Rival Tuskys has proposed a merger to resolve Nakumatt’s problems and is willing to support it while under administration, Nakumatt said in a statement on Monday. [nL5N1LZ203}

The High Court will hear Nakumatt’s application for administration on Nov. 8.

Compounding Nakumatt’s problems has been an economic slowdown in Kenya this year due to tensions surrounding a presidential election in August and its re-run last week.

($1 = 103.6000 Kenyan shillings)

Reporting by Duncan Miriri; Editing by Ed Cropley and Mark Potter

Related Content

Rwanda unveils $11bn climate action plan

The government of Rwanda announced a climate action agenda worth about $11 billion which features a 38 per cent reduction of greenhouse gas emissions by 2030. CNBC Africa spoke to Juliet Kabera, Director General of Rwanda Environment Management Authority for more.

This Rwandan publisher is creating buzz with new book App

After realising the challenges that come with publishing fellow African writers, home-grown publishing house, Imagine We Rwanda launched their very own mobile app, dubbed, Imagine Books. Fast forward 2 weeks and hundreds of titles have been purchased worldwide and the numbers are only going up. CNBC Africa spoke to the founder, Dominique Alonga for more.

COVID-19: This virtual concert campaign is bringing together African artists for charity

The COVID-19 pandemic has affected livelihoods across the continent and different initiatives have been instituted to support them. One of them is a campaign dubbed “We are one Africa” which aims to sustain various communities and groups through virtual concerts. Project Manager, Andrew Alovi joins CNBC Africa for more.

Kenya’s tech sector unveils video conferencing system

Kenya has recently launched the first made-in-Africa video conferencing system that will enable users to enjoy better quality calls with unlimited attendees, at more affordable prices. The video conferencing system will also enable African countries to retain the fees in local economies, compared to competition that repatriates it off the continent. Jay Shapiro, CEO and Co-Founder of Usiku Games joins CNBC Africa for more.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

How LGBTQ+ Pride Went From Movement To Marketing

With all of the changes to this year’s Pride lineup, many are left wondering how these virtual events will maintain their support of small LGBTQ+ owned businesses, like restaurants, bars, and brick-and-mortar stores, as well as LGBTQ+ focused nonpr

CNBC Africa celebrates 13 years on air

Today, June 1st marks our 13th Anniversary at CNBC Africa. As we celebrate our work and experiences at a time when the world is subdued by the coronavirus, here are views of some of our top analysts and friends from over the years....

Capital Appreciation’s Bradley Sacks on COVID-19 impact on business

Capital Appreciation, a JSE fintech player raised its final dividend by over 17 per cent following an increase in annual revenue and profits. The payment solutions provider saw increased demand for its digital and cloud based services and said the Covid-19 pandemic has not impacted earnings negatively. Bradley Sacks, Joint CEO at Capital Appreciation joins CNBC Africa for more.

COVID-19 lock-down: This is how much SA’s alcohol ban cost the economy

After a two month ban on liquor sales, stores reopened today and thirsty consumers were waiting in line to replenish their stock. While the industry expects liquor sales to spike in the coming days, the ban on sales during the Covid-19 lock-downs has cost over 117,000 jobs. That’s according to the South African Liquor Brand owners Association (SALBA). SALBA CEO, Kurt Moore joins CNBC Africa for more.

Partner Content

Sanlam Emerging Markets and its partners on the African continent invest over $12 million to fight COVID-19

As we go through this global pandemic together, it is the little things we miss. A high five, a handshake, a walk...

VIVO CEO is a dynamic leader for this innovative global brand

May 2020 -- Six months ago the vision for vivo in South Africa was just beginning to...

Trending Now

Billionaire Bill Gates: 6 movies and TV shows to help relieve pandemic stress

For billionaire Bill Gates, reading and watching TV and movies helps “stem the tide” of anxiety amid the Covid-19 pandemic, he said in a blog post on May 18.

The business book billionaire Bill Gates wants you to read right now

“In my experience, it is rare to find one that really captures what it’s like to build and operate an organization or that has tips you could really put into practice,” says billionaire and Microsoft co-founder Bill Gates.

Why Germany’s coronavirus death rate is so low | CNBC Explains

While Germany has one of the highest numbers of coronavirus cases in Europe, its death rate is significantly lower than its neighbors. CNBC’s Timothyna Duncan explores the strategies the country has employed to manage the spread of the disease. ----- Subscribe to us on YouTube: http://cnb.cx/2wuoARM Subscribe to CNBC International TV on YouTube: https://cnb.cx/2NGytpz Like our Facebook page: https://www.facebook.com/cnbcinternational Follow us on Instagram: https://www.instagram.com/cnbcinternational/ Follow us on Twitter: https://twitter.com/CNBCi...

“Stop this culture of frivolous allegations” former World Bank Treasurer Arunma Oteh defends African Development Bank President

"So my appeal really is that we dispense of this issue. That we stop this culture of frivolous allegations around the times of elections. And allow the African Development Bank to support the African continent at this important time.”
- Advertisement -