Struggling retailer limps back to life

Uchumi franchises Nairobi West outlet

In Summary

• Uchumi has plans to franchise other stores in addition to cost leadership initiatives

• Retailer will invest in going the digital way

Uchumi Supermarket outlet
Uchumi Supermarket outlet
Image: courtesy

Listed retailer Uchumi Supermarkets has gone into a franchise deal with local traders to operate the Nairobi West branch.

The agreement will run for five years. They did not disclose the amount involved in the plan that has seen six stores start operations in the facility.

The struggling retailer is fighting to get back its footing, and last month filed a creditors plan to the High Court.

The plan spells out strategies that Uchumi will take to reduce the ballooning debt now close to Sh3.6 billion.

These include  fast-tracking the ongoing restructuring process, waiving some of the retail chain’s debt and cost management.

CEO Mohamed Mohamed said franchising is among its strategic moves towards recovery.

“Franchising of this branch marks an important milestone for Uchumi Supermarkets. We plan to franchise other stores in addition to cost leadership initiatives,” said Mohamed in a statement.

He said the deal will be extended to other branches that are yet to be named.

The retail chain also plans to open smaller branches and going the digital to tap  online shoppers

Last October, Uchumi sought court protection to fend off multiple creditors in 45 legal suits seeking to dispose of its assets to recover debts.