Curtains have finally fallen on Kenya’s once largest retailer, following a move that will signify the end of a brand that was a household name.
Tusker Mattresses Limited (Tuskys) a family business that started in the dusty town of Rongai in Nakuru county before spreading its wings to all major town is set to lose its assets valued at about Sh6 billion in what could be the last nail on its coffin.
This follows the appointment of Owen Koimburi Njenga as interim liquidator for Tuskys, a move that signals the end of a four-year struggle by the once vibrant retailer to stay alive.
The liquidation marks the end of and era that was occasioned by several errors among them internal fraud, sibling rivalry, aggressive debt-fuelled expansion and fierce competition.
A liquidator is appointed when a company goes into winding-up and has the responsibility for collecting assets and settling all claims against the company before putting the company into dissolution.
The appointment of a liquidator means the supermarket will lose its assets in an auction.
In the ruling the High Court ordered the liquidation of the company as its Sh6 billion value, could not cover the Sh20 billion liabilities it owes.
Justice David Majanja stated that considering the value of the company’s assets, it was impossible for the company to ever settle its massive debts.
“More fundamentally though is the undisputed fact that the bank is a secured creditor. As a secured creditor, the bank is entitled to exercise its statutory power of sale without recourse to the court exercising insolvency jurisdiction,” Majanja ruled.
At its peak Tuskys boasted of a branch network of nearly 70 outlets, in Kenya and Uganda and in what looked like an indication of dominance in the market.
The signs of Tuskys' imminent collapse became evident in 2020, as the company faced mounting financial challenges and struggled to pay its employees and suppliers.
Amid reports of empty shelves and protests by unpaid staff, Tuskys' reputation took a severe hit.
Despite attempts to secure bailout deals and restructure its debt, the supermarket chain was unable to recover from the deepening crisis.
In July 2020, Tuskys was officially put under administration, marking a sad end to its once-dominant position in the East Africa retail market.
The supermarket chain's collapse had far-reaching consequences, affecting not only its employees and suppliers but also the broader retail ecosystem and the perception of business sustainability in the region.
However, in the past four years the supermarket has been hovering perilously close to a complete downfall reminiscent of Nakumatt, as the three-decade-long aspiration of its founder Mzee Joram Kamau wavered under the weight of debt and alleged miss management.
The collapse and subsequent liquidation of the supermarket is symptomatic of the problems bedevilling many family-owned businesses in Kenya.
Last year Equity Bank had pursued the auction of a five-story building located in the CBD that was hosting the Tuskys Imaara outlet over a Sh650 million loan that Equity Bank had provided to the building owner in 2014.
Initially, Kolluri Venkata Subbaraya Kamsastry had been appointed as the liquidator to sell the remaining assets.
A public notice placed in one of the local dailies, shows that Njenga’s appointment takes effect starting August 18 2023.
He was appointed the liquidator by the Nairobi High Court, Milimani Commercial and Tax Division.
Among known assets belonging to the supermarket are its headquarters on Mombasa Road, Nairobi, and a five-storey building within Nairobi’s central business district (CBD), which has been hosting one of the supermarket’s last remnants of its outlets, from 70 stores at the peak of its operations.
In the recent past, several retailers have either collapsed or quit the Kenyan market leaving analysts seeking answers as to what bedevils the retail industry in the country.
