Troubled retailer Nakumatt Supermarket is not taking a bow from Kenya’s retail space, according to its owner Atul Shah.
In an exclusive interview with the Star at Nakumatt Ukay, Shah laid out a turnaround plan for the once giant household name whose trademark is an elephant.
“With all the trouble that we have been through, we now have a credible plan...hopefully we should break even in the next two to three months,” he said.
In the plan, now in its fourth month, the retailer has retained seven out of its 47 branches. These are Nakumatt Mega, Prestige, Ukay, Lavington, Embakasi, Mega City (Kisumu) and Nakumatt Nakuru which are already in operation.
Shah said the retailer has neither brought in an investor nor has it borrowed money to execute the revival strategy.
“We depend on the ongoing flash sales and offers to finance the business,” he said.
He said that they restocked the seven branches with inventory from their last 27 branches before shutting them down.
The flash sales and offers range between 30 to 70 per cent off the original product price.
He said in collaboration with the Court Appointed Administrator, Peter Kahi, Nakumatt has brought on board at least 255 suppliers, and 650 employees. The suppliers are down from 550 while the workforce has been cut from 6,000.
In its hay days, Shah said, the retailer’s business model involved a 20 per cent consignment payment with the suppliers, but this has been reduced to 10 per cent with the remaining 90 per cent stock financed by the business.
He said the suppliers are paid on a weekly basis while some goods are bought on cash. This is unlike before when suppliers were paid within 60-90 days.
Shah said the retailer intends to have 70 per cent of normal products and 30 per cent of unique products that will form the basis for a returning customer.
Despite the recovery plan, the supermarket is yet to pay off a Sh35.8 billion debt owed to suppliers and landlords.
“We will share a plan in the next 2-3 months on how much of the debt we will be able to pay and over what period of time based on the success of our turnaround strategy,” Shah said
In March this year, the administrator sought votes of creditors on whether to write off 25 per cent of their debts and convert the remaining 75 per cent to equity, or not.
However, the plan flopped as a section of creditors refused to take part in the poll before seeing the full list of what Nakumatt creditors.