Uchumi Supermarket, Embu branch. (Photo Courtesy) Listed retailer Uchumi Supermarkets is quite literally a cat with nine lives. It has ducked darts, danced through barbs and almost closed shop four times but now lives to fight another tough round.
But for now shareholders of the troubled retail chain will have to hold onto the rails for longer as the management redrafts its strategy to make yet another attempt to turn around Kenya’s oldest retailer.
After surviving a monumental court battle to close it down last year, the company is back to the drawing board hoping to start off on the turnaround journey it had set out. “The winding up suit petition is behind us now after we reached an amicable settlement with suppliers. It was an extraordinary moment that demonstrated the high confidence suppliers and Kenyans have in the Uchumi brand,” the retailer’s Chief Exchange Officer Julius Kipng’etich said.
Uchumi has now come to terms with new developments that require a complete rethink of its strategy beyond the drop by drop lifesaving survival due to goodwill that has kept it afloat. When he joined Uchumi, the former Equity Bank Group’s Chief Operating Officer exuded confidence with vast experience that saw him succeed at Kenya Wildlife Service. Dr Kipng’etich saw Uchumi as a straightforward case he could easily turn around as a master of strategy.
But when he came on board he found Uchumi’s books with a gaping hole, a black hole in essence that was collapsing on itself. When an audit reassessed Uchumi’s books, the listed retailer owed suppliers Sh3.6 billion and banks Sh2.5 billion. This pushed it into a negative cash flow position.
The amount was up from Sh1 billion supplier debt estimated when former CEO Jonathan Ciano was bundled out of office. Undaunted by the task, Kipng’etich still saw hope, leveraging his banking network, his charming frankness and a strong resolve even as the retailer struggled to hold on.
He set up a team and drew a strategy that would have seen Uchumi’s shelves stocked and suppliers paid by now. But as fate would have it, his turnaround plan was not only tested but was put on trial literally. Suppliers who had lost confidence in Uchumi sought to liquidate its assets and have Kenya’s oldest retailer auctioned.