Uchumi shuts down two branches, renders 180 workers jobless

Uchumi supermarket has sent 180 workers on forced leave after closing two branches in Kabalagala and Nateete in the outskirts of Kampala, Uganda.

Gichamba Chege, the country’s acting General Manager, said they sent workers at the two branches on forced leave pending communication from the head office in Nairobi on the way forward.

The two branches were closed on Sunday and Monday respectively.

Early last week, the Kabalagala branch was closed after power supply was cut over a 70 million Uganda shillings electricity bill arrears.

The chain store, which has been running six outlets in Uganda, has already closed three branches over non-performance and tight competition.

In August, the struggling outlet appointed Dr. Julius Kipng’etich as its Chief Executive Officer.

Kipng’etich took the place of the Jonathan Ciano who was sacked recently alongside three other managers on grounds of abuse of office.

The recent past has seen Uchumi struggle to keep afloat amid spiraling debts running into hundreds of millions of shillings.

Kipng’etich is expected to steer Uchumi back to profitability.

In July, Uchumi Supermarkets Limited announced that it had finalized a Ksh 500 million term loan arrangement with the Kenya Commercial Bank to pay outstanding supplier debts.

Addressing investors in Nairobi, acting Chief Finance Officer Sam Oduor said the retail chain had also commenced the process of selling a 20-acre piece of land in Kasarani, Nairobi to improve business liquidity.

Oduor also intimated that Uchumi Supermarkets was also in the process of rationalizing its supply chain in order to optimize its stockholding.

Oduor added that they were also was reviewing its internal operating processes and procedures in order to seal loopholes that led to revenue leakages.

Oduor also announced that the board had suspended expansion to facilitate review of the profitability and potential of each branch in the network.

Further, Oduor said the organization was focusing on improving governance and would take drastic action on culprits of future infringements on its governance and ethics policies.

He said the main board had been reconstituted with the inclusion of three new members adding that with the ongoing recruitment the newly constituted top team should be in place latest 1st October 2015.

Speaking during the forum, Board Member James Murigu, standing in for Chairperson, Khadija Mire, admitted that the retail chain was still experiencing supply challenges but expressed confidence the situation will improve soon.

Jamii Bora Bank CEO, Sam Kimani, who sits on the board said the bank bought a 16% stake in Uchumi because the potential to grow and business synergies were far greater than current challenges.

“With over 800,000 customers and over 3,000 suppliers we see a big opportunity to partner with Uchumi for our mutual growth,” said Kimani.

The briefing was called to update investors, investment analysts, media and stockbrokers on progress made in getting Uchumi back on track following mismanagement that led to the sacking of Jonathan Ciano.