London-based insurer, the Lloyd’s market topped the list of big losers as Nairobi counted its losses in the wake of a deadly terrorist attack that claimed at least 67 lives and left dozens missing.
More than 50 businesses that operated in the shopping complex, including Nakumatt Supermarkets, Barclays Bank, restaurants, jewellery and clothes shops, with goods worth billions of shillings, are also facing huge losses whose extent is yet to be determined.
The more than 500 people who worked in the shopping mall have been left jobless and the announcement that three of the building’s floors had caved in during the three-day battle with the terrorists means it will take months for the businesses to get back into operation.
It has since emerged that Sony Holding Limited, a real estate company led by Alex Tachenberg, insured Westgate Shopping Mall through UK’s Lloyd’s market for about Sh6.6 billion.
The Lloyd’s market is a unique insurance provider with an internationally recognised brand whose business is underwritten by nearly 90 insurers who accept risk on a shared and competitive basis.
The insurance deal included a cover against political violence where acts of terrorism fall. Mr Tachenberg declined to comment on the matter.
Robert George, the Corporate Intelligence Manager at London-based Chaucer Syndicate Limited — the lead firm in the syndicate that insured Westgate — confirmed the contract. He, however, declined to discuss details of the deal, including who, if any, were its Kenyan partners and what is covered in the package.
“I can confirm that we (Chaucer) did lead the insurance of the centre (Westgate) in Kenya,” said Mr George, on a telephone and mail interview from London.
“Company policy does not permit any further comment at this time,” he said.
The Times of India reported that the mall that was built by Indian construction magnate Lakshman Raghavani and was initially priced at Sh4.2 billion.
Knight Frank, an upmarket property valuer, told the Business Daily that the building could not be sold for less than Sh6.9 billion.
Westgate business owners, some of whom tragically lost staff in the incident, are now counting their losses in one of Nairobi’s most prime locations.
Many had by Wednesday no idea of how much stock they lost in the ensuing battle to rid the complex of the invaders — but were cancelling orders already made.
The clothes store Deacons Kenya had four outlets in the mall — Mr Price Home, Identity, Woolworths and Addidas.
“The four stores accounted for 15-20 per cent of our Kenyan business and, therefore, this is a big blow for us,” said Muchiri Wahome, the managing director, adding that all 40 workers in the stores survived the attack.
“The directors shall sit and map out the way forward when we get clear directions as to how structurally sound the building is. Westgate’s owners are continuously in touch with us but it is still too early to make a decision.”
Nakumatt managing director Atul Shah said that the Westgate branch accounted for between nine and 10 per cent of the retail chain’s Kenyan revenues out of the 33 stores.
Mr Shah, who lost a brother-in-law in the incident, said he had been informed that the Nakumatt store in the shopping complex had been affected by the caving in of the floor but was to ascertain the full extent of damage.
“Nakumatt Westgate was our number one store in the country principally due to its location,” said Mr Shah, who also lost three workers in the attack.
The list of big losers also includes Savani’s Book Centre, which has had a store at Westgate since its opening, and Lintons Beauty World — a high-end cosmetics store.
Kavit Shah, an accountant at Savani’s, said the company was “still in the dark” on the fate of their store, adding it had stock worth “millions of shillings”.
“Westgate is located in a prime location and it is a big loss for us,” said Mr Shah.
Savani’s, he said, had around 11 employees and that all of them were safe. Joyce Gikunda, the director of Lintons Beauty World, described the anticipated revenue loss as “too much” and that she was worried about some of her international suppliers pulling the plug on their agreements.
Other than revenue and stock losses, Westgate’s employers must deal with the more sensitive issue of how to handle the hundreds of employees who are still traumatised from the Saturday attack and have no place to work.
Some of the businesses with branches in other locations in the city have promised to transfer the workers to other stores once they counselled and have taken a few days off work.
Mr Shah said Nakumatt had 254 employees at Westgate and plans were underway to deploy them to other branches.
“This was an incident that was beyond all of us and we cannot inflict double punishment by denying them income. We also want to keep their minds occupied,” he said.
Ian Heynike, the managing director of Innscor Kenya Limited, which operates fast food outlets such as Pizza Inn, Creamy Inn, Baker’s Inn and Galitos, also said the would relocate their workers.
“The 33 staff members will be redeployed across the business whist we assess the situation and the potential of resuming operations in the mall,” said Mr Heynike.
But in what could be a double blow to some of the employees, there were signs that some jobs, especially those in single outlets situated in the building, may have been lost forever.