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Botswana retailer raids Nakumatt for chief executive

Botswana retailer Choppies has head-hunted a senior Nakumatt Supermarkets manager to serve as chief executive of the struggling Kenyan unit.

The Gaborone-based retail giant – which owns 75 per cent of loss-making Ukwala Supermarkets – has hired Vijay Kumar to run the Kenyan business.

Mr Vijay previously served as chief financial officer at Nakumatt, a position he held since September 2009.

Choppies said Vijay will also be responsible for the retailer’s foray into the Eastern Africa region, where the it plans to set foot in Tanzania with one store in the pipeline.

“He has been tasked to identify new locations with high-growth catchment areas and potential malls in high density areas where the retail chain can set up its outlets,” said Choppies chief executive Ram Ottapathu.

The grocery store is listed on both the Botswana Stock Exchange and Johannesburg Stock Exchange.

Choppies invested Sh1 billion to acquire a controlling stake in nine Ukwala stores located in Kisumu (five), three in Nairobi and a single outlet in Nakuru. The remaining 25 per cent equity is held by Export Trading Group, a Tanzanian firm.

READ: Choppies seals year-long quest for Ukwala takeover

Mr Vijay’s immediate task will be to steer Ukwala to make profits, grow branch network, and manage costs in Kenya’s increasingly competitive retail market.

It revealed it has already closed ‘a couple deals with a few new upcoming malls’ as the anchor tenant, with a target date to roll out three new outlets in July.

Mr Ottapathu said the supermarket chain will use lower pricing and location as a strategy to grow revenue and turnaround the ailing Ukwala.

“Most of its stores are close to commuters and residential nodes offering attractive and wide ranges of internationally popular products at value-for-money,” he said in a statement.

Ukwala reported a net loss of Sh270.1 million in the year to June 2016 and is projected to remain in the red this year.

Sales stood at Sh443 million in the period under review, with gross profit standing at Sh77.4 million, while the gross profit margin coming in at 17.4 per cent.

Ukwala’s average basket size was Sh391.7, indicating that the retailer is still heavily dependent on lower middle class shoppers.

Choppies plans to grow Ukwala’s footprint fourfold in as many years to 40 stores, mainly targeting populous areas in urban areas.

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