Fashion retailer LC Waikiki has blamed low customer numbers for its continued losses at its outlet which is located at the Likoni Mall in Mombasa. This continued loss-making, says LC Waikiki, has now compelled the store to shut down by terminating its sublease prematurely.
These revelations have been made through affidavits that the retailer has filed in court after being sued by the Likoni Mall landlord for terminating a sublease before term.
In the affidavits by the retailer’s finance and accounting manager, Moses Chege, LC Waikiki Retail Ke Ltd says that the store at Likoni Mall has continuously recorded low sales and low customer numbers since 2023.
Chege further told the court that efforts to offer promotions and other marketing initiatives that were aimed at propping the business did not work, leaving the store making losses throughout since its establishment.
The retailer further says that after failing to meet its rental obligations to the landlord who was identified as Nova Holdings Ltd, it issued a three-month notice of termination of lease effective July 1, 2025. The lease was due to terminate on September 30, 2025.
However, Nova Holdings which is associated with tycoon Ashok Doshi went to court and sought temporary orders barring the retailer from vacating or terminating the lease. These orders were issued by the High Court.
In response to the suit by Nova Holdings, LC Waikiki says that it made efforts to work out the situation, including engagements with the landlord on interventions that could be worked out to support its business.
One of the interventions that was agreed upon was a reduction in rent by 10 percent. However, this did not shore up the retailer’s fortunes, with the business recording losses into 2025.
“A meeting was held between the parties after which an agreement was reached that [Nova Holdings Ltd] would grant [the retailer] a 10 per cent discount on rent for a period of six months covering July to December 2024,” Chege said in the affidavits filed in court.
The retailer said that on May 27, 2025, it held a meeting with Nova Holding’s Ashok Doshi seeking to find an agreeable way to exit the premises due to the continued losses. However, no agreement was reached.
“[We] duly communicated [our] intention to vacate the premises in good faith and in accordance with the terms of the lease; [Nova Holdings Ltd’s] refusal to accept the lease does not invalidate or suspend the termination,” said Chege in the affidavits.
In the case filed by the landlord, the landlord is seeking to have the retailer declared as having breached the terms of the sublease agreement that is dated January 24, 2022 and registered April 22, 2022.
The landlord is also seeking Sh40.4 million on account of rent and VAT, and Sh5.4 million in service charge and VAT.
“The termination of the lease by [the retailer] was done prematurely and 29 months earlier than the time permitted by the sub-lease for the defendant to terminate the lease,” the landlord says in court filings.
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