KENYA – Struggling retailer Nakumatt Holdings has shut down three of its remaining six stores, signalling trouble in the recovery path that it embarked on about two years ago, reports Business Daily.
The company, which is under administration, has closed down Nairobi’s Lavington and Prestige as well as Kisumu branches.
This has left the retailer with Nakuru and Nairobi’s Highridge and Mega branches as competitors in the market take up the vacated outlets.
The Prestige on Ngong Road and Lavington outlets have already been rented out to Naivas, according to notices on the premises.
Nakumatt’s administrator declined to comment on why the retailer has closed the branches over the past few weeks.
The closure comes at a time when the company’s creditors are waiting to know its financial position following an audit conducted by Parker Randall for the 2017-2019 period.
The audit firm failed to issue results to creditors at the end of July as originally planned in preparation for a meeting that was meant to take place thereafter.
This has forced creditors meetings to abort on several occasions but in November the court directed the audit firm to distribute the results by December 17 and a creditors meeting be held within a month.
Nakumatt’s financial position remains under mystery as the financial statements for between 2017-2019 are yet to be released.
The results that were set to be shared with creditors in September continue to be elusive as they remain in the dark regarding compensation and the supermarket’s way forward.
Nakumatt is deep in the red and it is anticipated that its over 2,000 creditors will eventually either be forced to write off the debt or convert it into equity, a plan they fervently rejected at a past meeting called by the administrator.
A section of creditors proposed the winding up of the retailer, questioning the viability of the rescue strategy dubbed Bounce-Back.
Secured creditors have the option of selling-off the retailer’s property to recover their money.
Court filings indicate that Nakumatt owes its suppliers, manufacturers and landlords an estimated Sh40 billion (US$400m), amounts that are unlikely to be paid off by the diminished operation.
The retailer’s creditors include Brookside Dairies, Haco Industries, Kevian Kenya and Tropikal Brands.