Nakumatt Supermarkets has closed down its Ronald Ngala branch in Nairobi.
The branch has been officially shut down after failing to open for a week. According to Nakumatt managing director Atul Shah, the branch was shut down due to low sales that left it unsustainable to maintain.
“We have closed the Ronald Ngala branch completely because it has not been making enough sales to make it sustainable,” he told a local daily.
The closure of this branch brings the total number of Nakumatt Supermarket branches to 63.
Strikingly, it comes shortly after rival Tuskys Supermarkets shut down one of its branches in Nairobi due to unknown reasons.
Additionally, the closure of the Ronald Ngala branch by the retailer comes amidst heavy financial storms that Nakumatt is currently facing.
Sources indicate that Nakumatt is is trying to strike a Sh. 7.5 billion deal that will see it sell a 25 per cent stake to a strategic investor in a bid to offload its biting debts.
According to South African rating agency GCR, Nakumatt’s gross debt more than tripled in as many years to Sh15 billion in the period to February 2015 from Sh4.2 billion in 2011. In the same vein, by 2014, Nakumatt, Tuskys and Naivas supermarkets owed suppliers over Sh. 8 billion in unpaid dues. These claims are suspected to have increased over the last two years.