10 January 2014

Kenya: Nakumatt Westgate Loss Could Hit Sh3 Billion

RETAILER Nakumatt is seeking the government's financial support to meet the Sh1.5 billion shortfall in recontruction costs for its Westgate store after getting a Sh1 billion insurance payout.

Nakumatt's insurer Mayfair, yesterday paid the second installment of the Sh1.01 billion owed to the retail giant for some of the losses incurred at its biggest store located at Westgate mall which was destroyed in a terror attack on September 21 last year. The first installment of Sh400 million was paid out last October.

"We are also in discussion with the government, we are looking for support in any area they can help us," said Nakumatt managing director Atul Shah. Shah added that whichever way the government financial support comes, be it a grant or a loan, it would be crucial in the rebuilding process.

According to Shah, the Westgate store had an average monthly turnover of Sh450 million and was the biggest in terms of size and sales volume in East Africa. However, the insurance payout made has not factored in complete cost of lost business hours. It covers 60 per cent of the losses Nakumatt has incurred since the terror attack estimated to be Sh3 billion. The insurance settlement by Mayfair covers part loss of the stocks, furniture, fittings and fixtures.

Nakumatt also lost three of its staff members and has had to use its own funds to compensate the families of employees that were killed. Nakumatt said it would take about two years to fully restore the Westgate outlet but added that a temporary small store will be in place in six months.

The government has set up a committee for Westagate restoration to get the mall operating as soon as possible. The committee has been mandated to, among other things, negotiate with insurance companies to give goodwill payments to affected businesses after it emerged many did not have a cover against terror.

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