Nakumatt takes on Junction Mall over ‘illegal’ closure

Nakumatt takes on Junction Mall over ‘illegal’ closure
Nakumatt has been evicted from Nakumatt Shopping Mall

Struggling retailer Nakumatt has taken exception with the closure of its Junction Mall branch after having signed a new lease agreement with the mall owners and its agent.

In a strongly worded response to the closure, Nakumatt management termed the move as fraudulent after seemingly having entered a deal to keep the store open.

“After posting a fraudulent and misleading public notice, the directors and managers prevented us from accessing our premises and exercising our legal and constitutional right to peaceable enjoyment of the premises and trading, Nakumatt said in a statement adding that it would take legal action over the matter.

According to Nakumatt, as the mall’s anchor tenant, the slowdown in business had seen traffic to the mall affected, forcing the mall owner to reach out to find an amicable solution.

In the said agreement, Nakumatt paid Sh20 million as a show of good faith while also stocking up the branch with over Sh64 million worth of goods to generate foot traffic.

According to the retailer, the three parties agreed on a December 1 to get the branch fully stocked.

“Demonstrates to the reasonable satisfaction of the Junction that it is taking verifiable steps before the Surrender Date to restock the premises to previous levels of normal trading by 1 December 2017, the Junction agrees that it shall not enforce the provisions of the Surrender and the Surrender shall stand terminated and be of no legal effect,” the retailer added.

The retailer considers the move by Junction Mall as underhand actions contrary to the terms of the agreement an in “utmost bad faith”.

Nakumatt is said to still owe the mall owners rent arrears and was part of the new deal signed.

Nakumatt has been struggling financially weighed down by huge debt as well as inability to generate new cash after suppliers stopped delivering goods.

In the space of two months Nakumatt has closed its NextGen and Thika Road Mall branches with the latter having to do with failure to pay rent.

Nakumatt is facing further legal action from landlords of its Diani and Mega branches over rent arrears.

The retailer says the closure of the branch has had a negative effect on its employees and customers at a time it’s trying to turn around its fortunes.

Nakumatt has entered talks with Tuskys Supermarkets over a possible takeover as a way to turnaround its fortunes.

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