Uchumi Supermarkets closes businesses in TZ, Uganda

Dar es Salaam. Uchumi Supermarkets Limited has closed its operations in Tanzania and Kenya in reorganization exercise intended to rescue it from imminent financial crisis, according to a statement circulated yesterday by its Chief Executive Officer, Dr. Julius Kipng’etich.

Dr Kipng’etich said the board of Uchumi Supermarkets Ltd had decided to close down the regional units in order to speed up the stabilization of its Kenyan operations.

“Our outlets in Uganda and Tanzania make up only 4.75 per cent of our operations yet they account for over 25 per cent of our operating costs. The two subsidiaries have not made any profits over the last 5 years which means they have been draining the parent operations,” said Dr. Kipng’etich.

The CEO said in a statement that the retail chain had informed the Capital Markets Authority, the Nairobi Securities Exchange and other key stakeholders of the decision.

He further said in due course the retailer would seek   shareholders’ approval for the implementation.   All stores in both markets are now closed and will be liquidated.

According to him, a retail chain will consider re-entering the markets at an appropriate time in the future once the parent business has stabilized, insisting that Uchumi will not delist from the regional bourses.

“It is important that we get Kenya  back to optimal operations and profitability by taking good care of our suppliers and creating value for our shareholders before reconsidering regional expansion, ” said the CEO.

“We are confident that we can now concentrate on turning around Uchumi   by focusing on the 95 per cent of the business that makes money for shareholders and are optimistic that we will achieve this within the shortest time possible,” he added.

On Tuesday about 50 staff of Uchumi Supermarkets at the Quality Centre in the city confined themselves behind doors for 20 hours to press their employer for clarifying on their fate of employment, following unofficial reports that business operations would be closed due to poor performance.

At around 12.50pm the aggrieved workers ended fracas after being told that their fate would be known on Friday.

Listed at the Dar es Salaam Stock Exchange with 100 per cent subscription of shares, Uchumi Supermarket which had operated in the country for two years had six outlets.

The outlets include; Dar es Salaam Branches of Quality Center Mall, Sinza branch, Kijitonyama, Mwalimu Nyerere Road branch and Moshi branch.