At least 900 staff from Tanzania and Uganda has lost their jobs after eleven outlets of the Uchumi Supermarkets have been shut down due to continuous loss for past few years.
Chief executive of the retail chain, Julius Kipng’etich, said the two subsidiaries have failed to make profits over past half-a-decade. The closure is to stop making further financial bleeding and to stabilize their Kenyan operations.
According to Julius, the operating costs was 25 percent where as the outlets managed making just 4.75 percent of the operations.
Last week Uchumi also shut down its two branches in Uganda – Kabalagala and Nateet e- in Kampala.
Julius added all the stores which are now shut down will be liquidated and the decision has been communicated with the Nairobi Securities Exchange, the Capital Markets Authority and other key stakeholders as well.
CEO of the retail chain said after stabilizing the parent business they may consider re-entering the markets in future when the time will be appropriate for opening the outlets again.
In 2014 six Uganda outlets of the retailer posted a pre-tax loss of Sh341.6 million. In 2013 the loss was Sh256.4 million and in 2012 it was Sh75.9 million.
Meanwhile, it is also reported Uchumi plans to open eight outlets across East Africa to help the company position the business competitively and strategically.
Earlier, in June this year the retailer replaced its former CEO Jonathan Ciano with Kipng’etich for gross misconduct and negligence.
Kipng’etich was the Chief Operating Officer of Equity Bank.
