KENYA – Kenyan retail chain Naivas supermarkets is set to receive US$15 million for the sale of its minority stake to IFC, a member of the World Bank Group alongside French private equity fund Amethis Finance, DEG and MCB Equity Fund.
“IFC seeks to make an equity investment alongside Amethis which will result in a minority stake in the company,” IFC said in a disclosure.
The new capital injection is earmarked for expansion in the highly competitive local supermarket business that has attracted major players across the globe.
“Through the proposed investment, IFC is expected to help the company optimise business operations and further strengthen its corporate governance structures,” IFC said.
“IFC will provide a food safety advisory programme that will ensure that the company complies with the Global Good Agriculture Practice (GGAP) that is more stringent than local standards. IFC will also help the company improve environmental and social (E&S) standards across its operations.”
Naivas is one of Kenya’s leading supermarket chains, with more than 60 stores nationwide. It was established over 30 years ago by the Mukuha family and became one of the top three retailers after the collapse of Nakumatt, which had dominated the sector.
Naivas has said that its growth strategy in the short term will be defined by increasing the number of its branches in strategic towns across the country and scaling up the more capital-intensive food market concept it pioneered with a maiden branch at the Capital Centre on the Nairobi-Mombasa Road.
The retailer, who is implementing the food market idea in partnership with a local interior design firm Renova Limited, is preparing to officially launch the latest fresh food stores over the next few weeks.
The fresh food concept is a design strategy that allocates more space to fresh food categories and involves clever displays and sometimes supermarket architecture overhauls, to accommodate inventories that match evolving customer needs and improve customer experience.
Naivas’ capital raising comes months after rivals Quickmart and Tumaini merged following their acquisition by Sokoni Retail Kenya, a special purpose vehicle controlled by private equity firm Adenia Partners.