More job losses are looming at troubled supermarket chain Nakumatt after the retailer shut down two more of its branches in an ongoing closure of non-performing outlets across the country.
The retailer, whose operations have come under strain due to its huge debt, has closed its Bamburi branch in Mombasa and the Lunga Lunga outlet in Nairobi’s Industrial Area.
Nakumatt has in the past two months closed three branches — Thika Road Mall (Thika Road), NextGen (on Mombasa Road) and the most recent closure being Westgate in Westlands, Nairobi.
The retailer was last week momentarily forced out of the Junction Mall and only resumed operations after the court’s intervention. Other branches in Kampala and Tanzania have also shut down. Nakumatt is yet to provide a tally of the job losses so far.
Bonface Kavuvi, Kenya Union of Commercial, Food and Allied Workers secretary-general, says the affected staff had been sent on “compulsory leave,” with their fate hanging in the balance.
“It is improper for Nakumatt to send these workers on the so-called leave yet it is yet to settle their salaries stretching back months,” he said in a telephone interview.
“At the end of the day, some people will most likely lose their jobs. However, if Nakumatt wants to declare anybody redundant, they should follow the law and our collective bargaining agreement.”
Nakumatt declined to comment on the specifics of the latest branch closures.
A representative of the firm said they “are preparing a stakeholders update” on the ongoing efforts to save the retailer, including the culling of non-performing branches.
The company in May announced plans to close its poorly performing branches in Kenya and Uganda as part of cost-cutting measures aimed at saving the retailer Sh1.5 billion annually.
The first store to be shut down was the Haile Selassie Branch located at the Kenyatta University Plaza, Nairobi, which was closed in May and the premises handed back to the university, the landlord.
The Business Daily’s sources now say as many as seven stores have been earmarked for closure as the retail chain seeks to put a lid on its overheads in the wake of dwindling revenues and an aborted capital injection plan.