Ailing regional retailer Nakumatt continues to sink into more trouble, announcing the closure of three of its top branches in Uganda.
In a statement released by Knight Frank Uganda on Saturday, the retailer, which is wallowing in dire financial woes, said its stores in Acacia Mall; Kololo, Village Mall, Bugolobi and Victoria Mall, Entebbe were on Wednesday last week closed indefinitely.
Knight Frank Uganda is the property manager of the malls.
“The supermarket space at these malls will go under redevelopment to add additional value to our shoppers and their shopping experience. We humbly regret any inconveniences caused, but keep watching this space to see how your shopping experience is taken to a new level in Uganda,” the statement signed by Knight Frank Uganda head of retail Marc du Toit read in part.
The retailer, which is currently grappling with massive stock-outs in its major stores locally, had also not paid its employees their May salaries until last week.
The retailer is said to have been expecting a Sh7.7 billion working capital injection from a yet-to-be-named private equity fund. Missing out on the capital injection has exacerbated its liquidity troubles and recently had its request for a State bailout flatly rejected after Managing Director Atul Shah wrote to Industry, Trade and Cooperatives Principal Secretary Chris Kiptoo, blaming its current woes on the Government. The supermarket chain, which early this year announced that it hoped to relieve itself liquidity pressure by saving Sh1.5 billion through branch closure, started off by closing its Nairobi’s Ronald Ngala branch in February before shutting down the Haile Selassie outlet.
The Nakumatt Katwe branch in Uganda was also closed two months ago. The erstwhile giant retailer – also with a regional presence in Tanzania and Rwanda – has embarked on a major restructuring strategy spearheaded by consultancy firm KPMG.
The Government through the Trade ministry is currently attempting to mediate in Nakumatt’s troubles with suppliers, hoping to save hundreds of jobs, although it has maintained a bailout is off the table. When Uchumi Supermarkets was in the doldrums, Treasury offered a shareholder loan of Sh1.8 billion. Nakumatt had reportedly sought similar treatment while blaming the Government for its current financial woes.
Mr Atul in his letter to the PS had cited a series of Government actions dating back to 1998, including a ban on imported beef suspected to have been contaminated with mad cow disease.