Uchumi Supermarket is now seeking a bank loan to pay its employees, who have gone for months without salaries.
Kenya Union of Commercial, Food and Allied Workers (Kucfaw) yesterday said the outstanding arrears run into at least Sh. 150 million since January.
“Uchumi has been in talks with a local financial institution for short-term funding. The talks are at advanced stage and funds should be released soon,” Uchumi CEO Mohamed Mohamed says.
The bank loan is also expected to pay off suppliers and rent arrears for its Ongata Rongai outlet that was closed on Friday.
Auctioneers took over the premises at Maasai Mall over the unpaid bills that have reportedly accumulated into millions since last year.
Kucfaw went to the Employment and Labour Relations Court last month for orders compelling the retailer to settle the workers’ salaries. A hearing date for the case is yet to be determined.
The association has also written to the Ministry of Labour over the matter, in the hope that it will use its powers to compel the retailer to pay the workers. Kucfaw also led workers across all Uchumi outlets in solidarity strikes last year.
Uchumi has struggled to woo investors to ensure its survival, with the collapsed Sh. 3.5 billion bid by US-based private equity funder, Kuramo Capital, in January being the latest.
Financial woes in the last few years have seen Uchumi’s once vibrant 40-branches across East Africa shrink to just over 20 outlets in Kenya.
November’s sudden resignation of Uchumi’s then managing director, Julius Kipng’etich, after two years at the helm further derailed the retail chain’s revival bid.
Uchumi and Nakumatt are two of Kenya’s most struggling retailers who have also exited key malls in Nairobi.
The entry of leading multinational retailers has coincided with trouble in the local players, notably Uchumi and Nakumatt, who have shut down more than half of their branches.
Botswana-owned Choppies has ten outlets in the country, while Carrefour that has four shops replaced Nakumatt at the Junction Mall on Ngong Road in January.
