Vasu Abotula. or Vasu Abotula, June 2016 was the crowning moment of his decades’ toil in business.
This was when he rang the bell, marking the listing of his firm – Nairobi Business Ventures – on the Nairobi Securities Exchange (NSE).
Together with a bunch of like-minded associates, Mr Abotula had started NBV as a wholesale shoe and leather products marketing company.
In its formative years, NBV had supplied to now fallen retail giant Deacons. At one point, its best performing outlet was minting a cool Sh4 million monthly.
When Pakistani retailer Servis Shoes was exiting Kenya around 2014, NBV took over its outlets, rebranding to K Shoes. Listing on the Nairobi bourse was the cherry on the cake for Abotula, and on the first day of trading, the firm’s shares traded at Sh8. Read More
"We had a strong balance sheet for over three years, turning a good profit and the company was growing,” recalled Abotula in an interview with Financial Standard. NBV had six outlets when it listed on NSE, with 15 more on the cards. The founders anticipated a ready market of 10 million pairs of shoes per year and growing. They even planned to venture into large-scale manufacturing.
"We saw an opportunity in retail. When I was starting the business, there were no problems and the economy was booming,” he said.
With the entry into the capital markets, there was no looking back for NBV.
However, heartbreak would soon follow, crushing Abotula’s vision for the company. In a recent circular to shareholders, he said retailers are paying a “heavy price” for the turbulent period from April 2017 to March 2020.
During this time, giants like Deacons, Nakumatt and Ukwala have exited the scene, while others like Tuskys have spectacularly unravelled. South African fashion retailer TFG, which ran four stores, left in a huff. Local fashion retailer Jade Collections is also trimming its branch network.
Abotula blames a harsh prolonged political and economic climate, which has dogged the country since 2016.He said this led to job losses that hit the firm’s target market. NBV targeted the upper-end and middle classes. It had branches in prime locations such as the Village Market. A pair of shoes would retail north of Sh10,000."When creamy jobs are gone, everybody preserves money and can’t buy fashion products,” said Abotula on NBV’s failed stab at the retail market. He noted that before things went south, their Kenyatta Avenue outlet, its biggest, […]