Retail analysts call for resolution to Nakumatt woes
Analysts now say that all attempts must be made to solve the current financial crisis of Nakumatt.
This they say is because the firm plays a critical role in Kenya’s retail sector.
For over 20 years, Nakumatt played a critical role in Kenya’s retail chain sector with close to over 46 branches locally and another 10 in the region.
The stores have been the poster child of a successful family owned business.
But its recent financial distress has opened the lid to how significant it is to the Kenyan economy, with an estimated Sh30 billion in debt.
Retail analyst Odhiambo Ramogi reckons more must be done to bring it back to its feet.
“Nakumatt going down would have a negative ripple effect t across the economy and any government worth its salt would want to avoid that,” Mr Ramogi said in an interview.
The retail sector has in the past contributed up to eight percent to the Kenyan economy with Nakumatt accounting for a large chunk of this.
This has however fallen in the last one year to close to five percent attributed to the woes bedeviling the sector.
“You do not want the economy to all of a sudden miss Sh20 billion that is coming to it every year….There are other small businesses that are on this malls that are dependent on the anchor tenant, these businesses will no longer enjoy the traffic that they are enjoying currently because Nakumatt is longer a tenant with them,” he said.
Even with its current shape and form Nakumatt says it needs more of capital injection as opposed to a strategic investor in the short term.
Already the government is mediating between the retailer and its creditors on suitable repayment terms.
“If that is solved with the proper capital injection, Nakumatt will be on its feet once again and try and supply its market with its products,” Mr amogi said.
on Tuesday, Trade Principal Secretary Dr Chris Kiptoo met with representatives from 8 banks urging them to work out a debt restructuring deal.
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