Uchumi closes five more branches

By Micheal Gichuki

Financial woes seem to be taking a toll on Uchumi Supermarkets with the latest announcement that the company is terminating its operations in five outlets within the country.

In a statement the retailer says the closure of the five branches is part of its strategy to reduce operational costs driven by the current business environment.

The closure of Uchumi Supermarkets branches started last year with the closure of the retailer’s branches in Uganda and Tanzania.

Uchumi Supermarkets had said the closure of non performing branches was to pave way for restructuring that aimed at bringing back the retailer to profit making.

The move was part of a shake-up process aimed at reviving the retailer’s regional performance after the entry of CEO Julius Kipngetich at the time. Kabalagala and Nateete in Kampala, Uganda, as well as Syokimau and Maua branches in Kenya were affected in the process.

Five months later, in a move that could now signify a financial meltdown for the retailer, Uchumi Supermarkets has announced yet another termination of operations in five more outlets within Kenya.

In a statement Uchumi says the closure of the branches which include Taj Mall, Embu, Eldoret Sugarland, Nakuru and Kisii will help reduce the retailer’s operational costs enabling it to concentrate its efforts on a leaner structure as dictated by the current business environment.

Uchumi’s reorganization began with the sacking of CEO Jonathan Ciano alongside Chief Finance Officer Chadwick Omondi Okumu for what the board termed as gross misconduct and negligence.

The new restructuring process is expected to turn around the struggling retailer, which owes its suppliers millions of shillings.

The poor store performance has been attributed to low staff morale as well as the absence of basic goods from the shelves. Earlier Uchumi had announced plans to re-enter the markets at an appropriate time in the future once the parent business has stabilized.

Following the new move by Uchumi Supermarkets to close down five more branches, 253 positions will be rendered redundant.




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