Kenyan suppliers back Tuskys recovery plan with US$11m stock guarantee

KENYA – The struggling retailer, Tusker Mattresses Limited is undertaking a major comeback with the relaunch some of its closed Tuskys supermarket outlets, alongside a new customer rewards programme dubbed ‘Tuskys Back-to-Back Sale’.

The programme which will celebrate the support of its loyal customers was launched at the Tuskys Greenspan Supermarket re-opening.

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The retailer has the backing of leading suppliers who are supporting the firm’s business recovery plans on a win-win basis with stock guarantee worth Sh1.2 billion (US$11m).

The Group’s CEO Dan Githua said the chain had already received assorted stocks, customer discount vouchers and giveaway merchandise valued at more than Sh200million (US$1.8m), as part of the programme.

He described the reward programme as a rebirth of Tuskys with the retailer now being on a recovery path with select branches optimally stocked.

“Several other branch relaunch events will follow the relaunch of Tuskys Greenspan across the country as we begin to regain our footing,” Githua said. 

“The coronavirus pandemic had occasioned business deceleration which had in turn impacted negatively on our financial position which we are now progressively restoring with the support of various stakeholders,” he added. 

The announcement to restock comes at a time when the Competition Authority of Kenya (CAK) said it is closely watching the retailer, after it defaulted on suppliers, a move that resulted in stockouts and closure of some of its branches.

In a letter to the CAK, Tuskys said it has already put in place a system, which will stop it from directly handling suppliers’ cash.

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Money paid at the till will be deposited in an escrow account, from where suppliers’ dues will be sent to them and the balance left to Tuskys.

The retailer also informed the competition regulator that the more than 100 suppliers have already signed up on the trading platform and intend to bring 90 per cent on board by end of this month.

The retailer has already reached a deal with some suppliers to repay the Sh2.4 billion (US$22.1m) debt in instalments over the next two years.

Association of Kenya Suppliers (AKS) CEO Ishmael Bett said its members have committed to supporting Tuskys recovery to foster growth in the sector.

“Our members are offering support to Tuskys to address issues that can jeopardize relations between suppliers and retailers. We hope that more suppliers will join the Tuskys Suppliers portal,” Bett said.

On her part, the Retail Trade Association of Kenya (RETRAK) CEO Wambui Mbarire stressed the need to review the operating frameworks within the retail sector to facilitate mutual growth.

“Suppliers and retailers need to come together to formulate a workable platform that does not appear to exploit either party. The rebirth of Tuskys is a good starting point to allow us to relook and solve retail challenges,” said Wambui.

Some of the key suppliers on the portal include; PZ Cussons, Menengai Oil, Mjengo Ltd, Aquamist, Anisuma Traders, Bidco Africa, Broadway Bakeries, Chandaria Industries, and Kenchic Limited.

Other suppliers include: West Kenya Sugar, East Africa Glassware Mart, Gal Baking, Pwani Oil, Towfiq Kenya, Interconsumer Products, and Premier Food Industries among others.

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