Kenya’s second-largest supermarket chain, Tuskys, has made changes in its top management, appointing a non-family chief executive for the first time in its 25-year history.
The appointment of Daniel Githua, the chief executive of Speed Capital, removes the Kamau family – which founded the retail chain and has been running it – from operational control in favour of a professional manager.
People familiar with the goings-on at the supermarket said the change of guard is the first step towards its listing on the Nairobi Securities Exchange (NSE) that is expected to happen within five years.
The decision to appoint a professional to run the fast-growing retail chain was made at a family meeting in February where, according to sources, the six siblings who have been fighting for control of the retail chain finally settled their differences.
Outgoing chief executive George Kamau said the family had agreed on listing through an initial public offering (IPO) as the best bet for the retail chain to raise additional cash for its expansion.
In addition to listing, the separation of ownership from management is expected to help Tuskys escape the fate of other African family-owned businesses that have proved incapable of thriving beyond the founders.
Tuskys chairman John Kago said listing will require the retail chain to strengthen its corporate governance structures as well as make stringent regulatory disclosures to the Capital Markets Authority (CMA), making it prudent for the company to start early preparations.
“Tuskys’ shareholders have decided to leave active management to the professionals in order to gain from a wider pool of resources. We intend to prepare this company to be great for generations to come,” Mr Kago said.
Mr Githua, the incoming chief executive, is already familiar with the retailer’s operations having headed its audit operations for three years before he left in 2012 to take up a position on the retail chain’s board.
The priority for the incoming chief executive is to streamline the company’s operations ahead of its debut at the bourse. The assignment includes setting aside stock for the retail chain’s employees and initiating new plans to attract younger consumers.
“My biggest mandate as chief executive will be to prepare the company for an IPO in the next five years,” said Mr Githua.
“The Kamau family is keen to have their loyal customers own part of the company because it is really the customers who have built the business. Employees should also own part of the company through an ESOP plan.”
An employee stock ownership plan (ESOP) is an employee-owner programme that provides a company’s workforce with an ownership interest in the company.
Mr Githua said the Kamaus wanted to connect with young shoppers and, therefore, needed to hire young, savvy managers who could adopt the latest technologies.
Separation of its owners from active management will make Tuskys a rarity in the retail industry which is characterised by strong family control of the chains.
Nakumatt, Ukwala, Naivas and Eastmatt are other large retail chains that are family-owned and run. Uchumi, which is listed on the NSE, is the only large chain that is not family-owned.
Carrefour of France and Game of South Africa are other large retailers that are opening branches in Kenya this year as they try to muscle into the fast-growing industry.
Tuskys is owned by five brothers and two sisters who took over the business following the death of their father Joram Kamau in 2002.
John Kago, the first born in the family, owns 10 per cent of the retail chain while Mr Samuel Kamau, Mr Mukuha, Mr Yusuf Mugweru and Mr George Gachwe Kamau have a 17.5 per cent stake each in Orakam, the holding company of Tusker Mattresses Ltd (Tuskys Supermarkets).
Each of the two sisters has a 10 per cent stake in the multi-billion shilling business.
Tuskys has also been in the limelight over a court battle pitting Mr Mugweru against three siblings he accuses of siphoning about Sh1.6 billion from the retail chain’s bank account.