Fashion retailer Deacons #ticker:DCON has retrenched five senior managers ahead of the expected closure of poorly performing branches by the end of next month.
The NSE-listed firm this week handed job termination letters to Joseph Sitati (chief finance officer), Jeddidah Thotho (retail director) and Olive Waithaka (ICT manager).
Martha Wareithi (4U2 & Angelo head) and Robert Nderitu (sports division head) have also been asked to leave the company effective Friday, the Business Daily has established.
The retailer, which reported a net loss of Sh278 million for the year to December compared to Sh100.6 million in 2015, says the sackings are part of an ongoing restructuring brought about by a depressed trading environment.
“We have let go of some senior managers as part of the austerity measures that are in response to the tough trading conditions we find ourselves in,” Muchiri Wahome, Deacon’s managing director, told the Business Daily in an interview.
“The affected staff, who have served us extremely well over the years, depart the company on Friday with a negotiated sendoff package which I believe is competitive.”
Deacons, which has 350 employees working in 46 outlets in Kenya, Rwanda, Mauritius and Uganda, a fortnight ago closed Angelo at Sarit Centre in Nairobi but redeployed the store’s four employees.
When announcing its full-year results on April 21, the retailer said interest rate capping on lending effective last September led to a reduction in liquidity in the market, decreasing customer spending and store productivity.
Mr Wahome at the time said that, while there are more shopping malls across the country, the number of buyers had not increased due to weaker purchasing power.
These depressed economic conditions, he added, has forced Deacons to initiate cost-cutting measures by closing non-performing outlets and laying off some staff to tame its wage bill.
“The board took advice from a professional about overlapping of roles and the existence of good successor candidates in these positions. Their number twos have been promoted, obviously at lower salaries,” said Mr Wahome.
Deacons joins a host of Kenyan firms that are downsizing, casting a dark cloud on the shape of the economy.