Uchumi Supermarkets closes businesses in TZ, Uganda
The Uchumi branch in Mbezi Beach, Dar es Salaam, is closed and deserted yesterday after the heavily indebted Kenyan supermarket chain decided to shut all its outlets in Tanzania and Uganda. The fate of hundreds of employees was unclear. Photo | Janet otieno
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On Tuesday about 50 staff of Uchumi Supermarkets at the Quality Centre outlet in the city confined themselves behind doors for 20 hours to press their employer to clarify on their fate of employment, following unofficial reports that business operations would be closed due to poor performance.
Dar es Salaam. Uchumi Supermarkets Limited has closed its operations in Tanzania and Kenya in a reorganisation exercise intended to rescue it from imminent financial collapse, according to a statement circulated yesterday by its CEO, 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 stabilisation 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 five years which means they have been draining the parent operations,” he said.
On Tuesday about 50 staff of Uchumi Supermarkets at the Quality Centre outlet in the city confined themselves behind doors for 20 hours to press their employer to clarify 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 their sit-in after being told that their fate would be known on Friday.
Dr Kipng’etich said in his statement that the retail chain had informed the Capital Markets Authority, 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.
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 Centre Mall, Sinza, Makumbusho and Moshi.
