Reprieve for Nakumatt as court order blocks Junction Mall closure

Nakumatt has obtained orders from the High Court blocking Junction Limited, which had moved to shut down its premises, from effecting the closure until an inter partes hearing is held on October 16 this year.

The development will be a reprieve for Kenya's largest supermarket chain, which had earlier today accused owners and managers of the Junction Mall of underhanded tactics in the closure of the key branch over the weekend.

Nakumatt argued before Justice Joseph Onguto that it had fulfilled its obligations in accordance with an agreement made with the mall's owners last month.

“The Junction Mall’s underhand actions on Saturday night, including locking the branch and publicising a fraudulent and misleading notice claiming that the premises have been surrendered by Nakumatt, are clearly contrary to the terms of the Agreement, illegal and of utmost bad faith,” Nakumatt MD Atul Shah pleaded in his affidavit filed in court today.

According to the retailer, the deal required Nakumatt to pay Sh20 million to the mall's owners as well as ensuring that it has taken steps to restock its premises to previous levels of trading.

Nakumatt says the move to close down the branch has hurt its staff and customers, adding that it comes at a time when it is trying to turn around its business despite a tough economic environment.

"We met with the directors and managers of the Junction Mall led by director Andrew Ndegwa and the MD of Knight Frank Ben Woodhams on 25 September 2017 to demonstrate to them the restocking plan that we had initiated and that was building up to achieve full stocking by 1 December 2017. The directors and managers wished us well in this endeavour," the retailer said.

The family-owned business has so far had to close its Thika Road Mall (TRM) branch and the NextGen Mall outlet on Mombasa Road after just nine months of operations, making last weekend's closure the third in just a few months.

READ: Nakumatt closes its TRM branch

The troubled retailer had earlier in the year indicated that it would close poorly performing branches in Kenya and Uganda in order to cap costs as it looks to save Sh1.5 billion annually.

Editor's note: An earlier story has been edited to include updates from the High Court order.