14 July 2018

Kenya: Uchumi Pins Its Hopes on Franchises

Struggling Kenyan retail chain Uchumi Supermarkets is banking on the sale of a $30 million plot of land in Kasarani, Nairobi and franchising of some of its branches as its only hope of staying open after the government ruled out injecting more money into the company.

Uchumi chief executive officer Mohamed Ahmed Mohamed said the board concluding discussions on franchising of its Lang'ata Hyper branch while talks on the sale of the land are at an advanced stage.

This is in order to unlock emergency funding for the retailer, even as it looks to raise long-term financing in the form of debt or equity by the end of the year.

"Our franchisee will put up stores, which we will manage at a fee while also earning royalties," Mr Mohammed told The EastAfrican.

Uchumi urgently needs cash to shore up its financial position, which has been badly damaged by sustained losses and failure to attract new capital from investors. However, the situation worsened last week when the government refused to advance more money to the ailing retailer.

According to the Ministry of Industry, Trade and Co-operatives, the government has already advanced a lot of money to Uchumi as part of a recovery plan, but the retailer has failed to live up to the terms of the bailout, forcing the government to halt further disbursements.

Uchumi is heavily indebted to the amount of $43.5 million, owed to suppliers in Kenya, Uganda and Tanzania, including accumulated salary arrears of four months amounting to $1.5 million.


Mother Faints as Sharon's Body Arrives Home for Burial

It has been about one and a half months since the 26-year-old Sharon Otieno was abducted and her lifeless body found in… Read more »

See What Everyone is Watching

Copyright © 2018 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.