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Naivas shuts down two branches

Chain retailer Naivas Supermarkets has closed its Ronald Ngala branch in Nairobi (adjacent to Tuskys Supermarket) and relocated the Githunguri branch to Utawala in what they said was operational and management process aimed at cutting costs.

Speaking to Business Today, the Chief of Operations at Naivas Willy Kimani refuted claims that they feared competition from their rival, Tuskys Supermarkets, which seems to have been reenergised after they acquired a stake at the struggling Nakumatt. Tuskys has a branch adjacent to the Naivas one.

“We do not fear any competition at all. The stores’ operations were relocated to the new stores. The Githunguri store’s operations have been moved to Utawala and old Ronald Ngala to new Ronald Ngala branch. Ronald Ngala branch was adjacent to the new one and hence management thought it wise to merge the operations,” explained Kimani.

He added the retailer was concerned with the performance of the Githunguri branch, revealing that it performed below the expectations and hence the decision to move it to Utawala. “Githunguri store did not fit well with the company’s financial vision (hence we shut it down),” added Kimani.

However, Kimani noted that no staffer will be affected by the shut down and relocation, saying that, instead, they would still hire more people to man the Kericho and Old Barclays stores.

“All staff members were absorbed and also in the process of adding new staff members for Kericho branch and former Barclays Moi avenue store,” he assured.

Naivas joins Nakumatt, which has been downsizing in recent months, and also owes various landlords and suppliers millions of shillings. Some of their properties have been confiscated by the Thika Road Mall, which says it is owed Ksh 50 million in rent arrears.

Kimani also blamed the tense political duels to slowdown in business, especially on the high value items.

READ: Court allows closure of Nakumatt Junction

Naivas Limited was started in July 1990 as a privately owned company by Peter Mukuha Kago, who died on 6 May 2010. It previously traded as Rongai Self Service Stores Limited, serving mainly in Rongai in Nakuru County. The company name was changed later to Naivasha Self Service Stores Limited, before re-branding to the current Naivas Limited, in 2007.

In August 2013, the Johannesburg Stock Exchange-listed Massmart, a subsidiary of retail giant Walmart, offered to acquire a 51% stake in Naivas at a cost of KSh3 billion, giving Massmart a controlling interest in the retail chain. The bid triggered a feud at family-owned Naivas, and some family members asked a court to block the sale.

In October 2013, Naivas management stated that they were no longer selling a controlling stake to Massmart. On 16 July 2014, Naivas opened a store in Garissa, making it the first major retailer to open an outlet in the town. This was Naivas’ 31st branch in Kenya. Currently, Naivas has more than 40 branches across the country.