Uchumi Supermarket has announced the closure of its Sarit Centre branch on February 25,terminating a lease that has stretched for 30 years.
Struggling Uchumi Supermarket shuts down Kenyan branch a day after announcing $8.95 million half year net loss
The closure will take place at close of business Sunday 25th February
In a statement on Friday, the struggling retail chain said the move was aimed at cutting down on operational costs as it continues to align with changing trends in modern trade.
"The decision is part of the retail store’s comprehensive turnaround plan and new cost management strategy that seeks to streamline its store portfolio and intensify cost efficiency efforts per store," read part of the retailer's statement.
Chief Operating Officer Andrew Dixon thanked the management for their support adding that focus now shifts on relocation of the outlet to more cost-effective and strategic places.
This, he said, will see them manage costs, settle debts and optimise cash flow.
"We also remain focused on executing key initiatives to drive improved performance in an effort to strengthen our capital structure to support the business going forward," he noted.
The announcement comes barely a day after the retailer announced 63.5 per cent net loss for the half year ended December 2017 to $8.95 million (Ksh911 million) on the back of a sharp drop in sales.
The retailer had made a net loss of $5.47 million (Ksh557 million) in the same period the year before.
Uchumi's revenues declined 71.4 per cent to $5.27 million (Ksh536.8 million) from $18.5 million (Ksh1.9 billion) similar period in 2016.
The retail chain has posted a series of losses in the last three years as it struggled to turn around after it fell into receivership in mid-2006 following a botched expansion plan.
Private equity firm Kuramo Capital, which had been approached by Uchumi to inject $35 million (Ksh3.5 billion), pulled out and the retailer says it is now in talks with another investor from Asia.
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