Fred Aminga @faminga
Local retailer Uchumi Supermarkets is banking on a resurgence this festive season to turn around its dwindling fortunes after a tumultuous two years.
The retailer has already received Sh700 million bailout from the government to restock amid a biting cash crunch that saw the chain haggle with periods of turbulence as suppliers and workers withdrew goods and services.
Armed with new cash warchest, the retailer has managed to reopen and restock most branches in Nairobi and upcountry, as suppliers start to release goods. “We need to get out customers back this festive season. We have identified about 200 suppliers, 80 per cent of whom are doing fast moving consumer goods to restock starting with Nairobi.
We have since started stocking all other shops throughout the country,” says Andrew Dixon, Uchumi’s chief operating officer. While most of the cash went to restocking, Dixon says Uchumi paid employees while the rest of the cash went to satisfy urgent debts such as rent and power bills.
As part of it’s medium term plan, the retailer is banking on a strategic investor to boost cash reserves and enable the chain to meet obligations. In July this year, Uchumi had to clarify that it had not reached any deal with a strategic investor despite media reports.
But Nixon is upbeat that this time round the retailer will seal a deal for equity to boost finances and operate as required by the Nairobi Securities Exchange (NSE).
“I can confirm that we are in talks with an international investor for some Sh3.4 billion capital injection. We are also planning to get another Sh3 billion as proceeds of the sale of Kasarani property,” Dixon said.
The government is also set to release a further Sh600 million to revive the Tanzania and Ugandan shops which have also been shut following the cash crunch. According to Dixon, if these plans fall in place, the NSE listed retailer will be one of the most capitalised indigenous retailer in the country.