REVEALED: Reasons behind Nakumatt’s slow death
A combination of factors including gross mismanagement, poor strategic decisions, tax issues and massive internal losses perpetrated by some wayward employees and suppliers are the main reasons behind the slow death of giant supermarket chain Nakumatt, multiple sources familiar with the retailer’s financial tribulations have told the Nation.
One of the sources likened the retailer’s fate to the way a pyramid scheme is eventually fated to collapse after some time: “For a long time Nakumatt has worked hard to keep this façade of a profitable company while knowing that the opposite was true,” the source said.
Since it was founded in the 1980s as a small retail outlet in Nakuru town, the supermarket’s iconic logo of an elephant clutching a shopping bag in its trunk symbolised its stability and reliability. But the elephant is no longer at ease.
For months now, Nakumatt, short for Nakuru Mattresses, has been tottering under the weight of mounting debts, estimated to be upwards of Sh15 billion.
But being a private company, the true extent of its financial burdens — just as it has been with its profits — remains a secret only known to its owners.
The sad pictures shared by customers confronted by rows of empty shelves in its 66 branches across Kenya, Uganda and Rwanda, and nearly idle employees, tell the sad story of its rapid descent down the abyss since mid-last year.
And now the government is worried Nakumatt’s sorry state of affairs may have far-reaching ramifications not just to its suppliers and others owed mountains of cash by the retailer, but to the entire economy.
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