This archive report was first published on 4 January 2020.
January 4, 2020
Nakumatt Retail Empire Collapses Amid Debt Crisis ¶
Nakumatt, once a retail giant in Kenya and East Africa, has officially collapsed after its creditors voted to dissolve the company. The decision comes after efforts to revive the supermarket chain failed, leaving behind a trail of unpaid debts amounting to Sh38 billion.
The creditors, including banks, suppliers, and landlords, will share a paltry Sh422 million received from the sale of six Nakumatt branches to Naivas, a rival retail chain. The sale was concluded in an attempt to revive the struggling retailer, but it appears this dream has been shattered.
According to Peter Kahi, the court-appointed administrator of Nakumatt, the creditors' meeting on January 7 will formally end the Nakumatt brand if the creditors support the liquidation plan. The administrator will distribute the Sh422 million among the creditors in line with the Insolvency Act 2015, after meeting the costs of the administration.
Nakumatt's collapse is a result of its failure to repay its suppliers, landlords, and other creditors. The company, which grew from a mattress shop in Nakuru to have branches across Kenya and East Africa, was forced to shut dozens of outlets from 2017 as it struggled to stay afloat.
By February 2017, Nakumatt had 60 branches, but this number dropped to six in September 2018. Its sales also plummeted, with a drop of Sh1.9 billion in the year to February, down from Sh51.9 billion in a similar period in 2017.
