Uchumi Reopens After 45 Days of Closure

By Godfrey Tung'wet Posted 15 July 2006 @ 02:13 pm EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - Uchumi Supermarket opens its doors today after almost six weeks of closure.The supermarket chain will initially open five outlets in Nairobi — Sarit Centre, Lang’ata, Mombasa Road, Ngong Road and Aga Khan Walk branch.

The reopening of Uchumi will initially take place under legal protection of the current receivers appointed by Kenya Commercial Bank and PTA Bank.

Trade and Industry minister Mukhisa Kituyi said the decision to revive the company was made "because it was a national brand with unquestionable customer loyalty that had provided an outlet for small-scale farmers, manufacturers and other entrepreneurs."

He said last week that the high-profile reopening at the Sarit Centre branch would include various incentives for shoppers.

At the time when it was closed on June 1 under the weight of liquidity problems, Uchumi owed creditors —banks and suppliers - more than Sh3 billion and its asset base was Sh1.8 billion.

Kituyi said the Government would avail over $9.3 million while shareholders had agreed to inject another $4 million to give the chain a new lease of life.

The banks also agreed to restructure their loans consistent with Uchumi’s current financial status and to give a moratorium on capital repayments while the suppliers undertook to immediately resume deliveries.

But as Uchumi starts a new journey on saturday, it is re-entering a market characterised by stiff competition for customers while other retail chains have increased their presence by increasing their branches.

Racing to boost their revenue growth, major players in the market like Nakumatt, Tusker Mattresses and Ukwala, have been on the expansion trail.