Retail chain Uchumi is betting on the sale of its prime land in Nairobi’s Kasarani to fuel a comeback bid that started yesterday in earnest with the restocking of its stores countrywide.
Andrew Dixon, the company’s chief operating officer (COO), said that the land, which is now valued at Sh3 billion, had attracted very competitive bids that should come through in due course.
“We have a willing buyer and we are closing in on the Sh3 billion land deal, hoping it will help us bounce back,” Mr Dixon said.
Proceeds from the land sale will be used to settle part of the retail chain’s huge debts, including money owed to suppliers and landlords.
“We hope to settle our liabilities and use the money to refurbish some of our stores in order to improve the retail environment,” said Mr Dixon during the restocking of Uchumi’s Capital Centre branch in Nairobi.
The retail chain had closed its stores on Wednesday for cleaning and restocking in readiness for a big comeback during the festive season.
Mr Dixon said Uchumi will be restocking all its 20 stores at the weekend in a bid to revive the local brand.
“The company has been struggling for years, but today (Thursday) we are opening a new chapter of success in our books. We will have restocked 95 per cent of our 20 stores by weekend,” he said. News that Uchumi was restocking its stores kicked off a share price rally at the Nairobi Securities Exchange that hit Sh4.10 Thursday from Sh3.50 on Wednesday.
Mohamed Mohamed, Uchumi’s acting chief executive, said that the retail chain was about to ink a deal with the much-awaited foreign investor as part of the recovery plan -- opening a new chapter for the local brand.
“We are locking down on our financial investor and we are hoping the funds will come through around next January,” said Mr Mohamed.
“We are looking at Sh3.5 billion from the equity investor.” Uchumi put up the Kasarani land for sale in 2015 and owners of the Thika Road Mall are said to be among the bidders who had expressed interest in acquiring the 20-acre piece of land.
Sale of the land was to inject much needed liquidity on Uchumi’s balance sheet.
The land, which is located on the Thika super highway has, however, been the subject of protracted court battles between the retail chain and squatters who had claimed ownership of the prime property but the court in September declared the cash-strapped retailer to be the legal owner of the land.