Tuskys to cut its branch network by half


Tuskys to cut its branch network by half
File image of Tuskys Supermarket. PHOTO| COURTESY

In Summary

  • The branch network reduction is expected to push out more workers from the retailer which has already declared multiple redundancies so far in the year, sending hundreds of staff home.
  • Tuskys is backing the network consolidation drive to leave it with a leaner fixed-cost base to steady operations which have come under scrutiny under the ongoing liquidation petition.
  • The retailer’s footprint has already shrunk considerably from a high count of 64 under various distresses including auctions triggered by landlords over unpaid rent.
 

Besieged retailer Tuskys has indicated plans to reduce its branch count by more than half to 25 from its current 52 stores around the country.

The consolidation plan was revealed earlier on Tuesday during the hearing of two wind up petitions submitted by Hot Point Appliances Limited and Syndicate Agencies Limited.

The branch network reduction is expected to push out more workers from the retailer which has already declared multiple redundancies so far in the year, sending hundreds of staff home.

Subsequent layoffs are expected to keep the retailer at loggerheads with its workers union- the Kenya Union of Commercial Food and Allied Workers (KUCFAW).

Earlier this month, the High Court extended orders barring Tuskys from firing its unionised staff pending the hearing and determination of a petition by KUCFAW on the nature and legality of layoffs.

Tuskys is backing the network consolidation drive to leave it with a leaner fixed-cost base to steady operations which have come under scrutiny under the ongoing liquidation petition.

The retailer through lawyer Patrick Agola says it will analyse the efficiency and location of its current branches while making the decision on which stores to cut off in the shrinking exercise.

Earlier, Tuskys completed a fresh series of creditor meetings which sort to glue aggrieved parties to its turnaround plan which was filed in the High Court on Tuesday.

Tuskys is subsequently expected to hold further talks with a Mauritius based private fund having earlier reached an agreement in principle which will see the fund inject Ksh.2.1 billion in working capital to accelerate the retailer’s stabilization efforts.

The retailer’s footprint has already shrunk considerably from a high count of 64 under various distresses including auctions triggered by landlords over unpaid rent.

For instance, earlier this month Tuskys lost its presence in Athi River and Donholm after its respective landlord executed auctions on its stock to recover pending arrears.

At its height of operations having taken over as the largest retail store from the now defunct Nakumatt, Tuskys was employing 6000 staff and had presence extending to neighbouring Uganda.

Hearings on the pair of wind up petitions against the retailer are expected to proceed on January 28, 2021.

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