THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 9

THE AFRICAN BUSINESS FORTUNE - RETAIL

Uchumi needs online presence to stay afloat

Uchumi-Supermarkets-chief-executiveJulius-Kipng’etich

By Olive Gerro

K

enya’s retail supermarket, Uchumi
is a brand that evokes pride and
patriotism, but over the last few
years, the renowned retail ‘powerhouse’
has had a lot of things go against its repute.
Available figures as of September
2014 show that the retailer was among
Kenyan supermarket chains that served
the East Africa region while in June of the
same year, the company’s assets stood at
US$78.8 million with shareholder equity
of approximately US$38.4 million.
Uchumi began operations in 1975 as
a public limited company by three state
owned firms namely; Industrial and Commercial Development Corporation, Kenya Wine Agencies Limited (KWAL) and
Kenya National Trading Corporation.
The main objective at the time was to
create outlets for the equitable distribution of commodities and to create retail
outlets for Kenyan manufactures.
A year later after its formation, Uchumi’s shareholders signed a management
contract with Standa SPA – an Italian retail supermarket with an aim of raining

Kenyans to run the new enterprise and
16 years later the company listed on the
Nairobi Stock Exchange (NSE) in 1992.
Uchumi closed down, albeit temporarily, and was placed under receivership in
June 2006 after 30 years of operations.
Its closure was described as ‘one of the
greatest corporate disasters in independent Kenya history’
A government-led rescue plan, however, was initiated and consequently
five Uchumi outlets all in Nairobi were
reopened on 15 July 2006 under interim
management and a caretaker administrator.
By January 2011, the retail chain had
returned to profitability and applied to
the Kenya Capital Markets Authority to
re-list its shares on the NSE.
Approval to re-list at the Nairobi
bourse was granted in May 2011 and
trading in the shares of Uchumi resumed
in May the same year.
Uchumi had 24 outlets spread across
the country before revelations were
made of the retailer having ‘cooked its
books of accounts’ three years ago which
led to the subsequent closure of Uganda

and Tanzania subsidiaries.
Uchumi in the 90’s and early 2000’s was
the key player in the retail chain store business but the questions most people are asking is what went wrong for the state owned
supermarket now that signs are pointing
towards it’s collapsing for the second time
after the first scare in 2006.
In 2006 the Kenyan government pumped
in $ 7.3 million as part of the recovery strategy that at point saw the company place under receivership. Uchumi is so far one of the
most successful turnaround stories in the
Kenyan business sphere under the leadership of Jonathan Ciano.
Even after turning around the retailer to
profit making, Ciano was shown the door
and in came Julius Kipng’etich – who has
been entrusted to return the company into
glory days.
Ask Uchumi shareholders what they feel
about the man at the helm, and you’ll feel
the optimism that is still there for a group of
individuals who are now demanding a new
dawn in the company.
One key aspect will be crucial for the revival of Uchumi – Innovation and Online

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