OPINION: From gold to ashes; the tragic tale of Nakumatt Limited


OPINION: From gold to ashes; the tragic tale of Nakumatt Limited

In Summary

  • At its peak in 2014, Nakumatt, a regional retailer which was valued at a whooping Ksh. 35B  announced plans of cross listing in all regional stock markets in a plan that would have materialised in in 3-4 years
  • In 2017, before the retailer celebrated its 3oth anniversary it started shutting down branches across the country orchestrating its slow and unceremonious fall from regional glory
  • On Tuesday, January 7, 2020 Nakumatt was liquidated bringing its tragic fall from glory to a quiet end

As a student at Maseno University, a trip to Kisumu town was never complete without a detour at Nakumatt Mega.

Arriving back at the institution with a Nakumatt printed polythene bag was the hallmark of a successful trip not even a lunch date at the popular (now abolished) lwang’ni would match up.

It was where all students aspired to shop. It had so many things going right for it. Well stocked, fairly priced (so we thought), airy aisles, well groomed staff,  you name it. Its peers in town like Yattin and Ukwala supermarkets were ranked far below the beloved Nakumatt.

As a journalist writing for the Daily Nation, I closely interacted with the brand, professionally and privately. Around the corner along Kimathi Street there was a store. Quick dash for a snack, monthly shopping and a cold soda on some days to quell the buzzing headache after the previous night’s engagement, it offered all.

Sometime in early 2008 just as the country was smarting as a result of the hotly contested 2007 General Election. I visited their headquarters along Mombasa Road. I was on assignment to interview  the then face of the company Thiagarajan Ramamurthy.

He popularly went by the initials TRM, this was in some quarters also coined as Total Retails Man. He had worked the magic for Nakumatt. He is credited with growing it to one of the most admired retail brands in the region as its operations director.

During the interview, despite the chaos and violence that had rocked the country, TRM remained optimistic. He shared their plans for the year and Kenya’s economic prospects.

As a journalist, I would often interact with the company in the course of my career. One highlight that Nakumatt often threw around was their plans to list at the Nairobi Securities Exchange.

The thought, my seniors Wachira Kangaru and Justus Ondari wrote ferociously about. It would have been a turning point for many home grown brands. A Nakumatt Initial Public Offering was a good story.

At its peak in 2014 as a regional retailer, loved and loathed in equal measures its managing Director Atul Shah announced plans once again to list at NSE. This time around, the bullish Mr Shah also added they were thinking of cross listing in all regional stock markets. This happened even after the retailer suffered greatly during the unfortunate Westgate Mall terror attack.

A 25 per cent stake that they at that time said they would be offering was estimated at close to 9 billion shillings. The retailer then was valued at more than 35 billion shillings. This pronouncement also followed what had been in the news, a search for strategic investors from way back in 2010

The plan Mr Shah added would materialise in 3-4 years. This was to make 2016 or 2017 significant years for the retailer. In my calculations these would have coincided with its 30th year in operation. Nakumatt was founded in 1987 in the industrial town of Nakuru.

But in 2017 things had taken a huge turn. The telltale signs of a retail behemoth in distress started showing. A management shakeup that saw Mr Shah forcefully come out as the face of the company, previous managers and directors exiting and new ones joining told it all.

Then it began shutting down its branches across the country. At its peak, Nakumatt boasted of 60 well stocked branches in East African region. As of today it is left with three thinly stocked branches. Perhaps out of nostalgia

By 2018, when it was supposed to be celebrating its 31st birthday, things were thick! Suppliers, landlords, employees and lenders ware baying for the management blood. It could not pay what it owed to them.

What followed next is the story of ‘from gold to ashes’ as the Nakumatt empire fell. The story of a once admired brand, the regions benchmark in retail industry turned to be that of debt, pity and auctioneers falling over themselves on which branch to sell

As of this afternoon (Tuesday January 2020) the ruins of Nakuru Mattress lies before creditors at the Oshwal Centre in Nairobi. A vote is being taken to liquidate it. Creditors only have a paltry 422 million shillings out of the possible 38 billion shillings owed to them to share.

Nakumatt came and went. An illustrious run-off of a family-built and controlled giant, which has gone down with the secrets of its fall.

In its place various local supermarkets have sprung up. International brands have also joined the fray eating up lunch that Nakumatt Limited prepared but never lived to taste. A ballooning space that today accommodates many players.

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Story By Joseph Bonyo
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