Struggling Choppies closes third outlet

Kenyan retailer Tuskys has taken over Nanyuki Mall as anchor tenant after Botswana's Choppies Supermarket was pushed out, losing its third branch.

This year Choppies has closed its Kiambu and Bungoma outlets as the firm experienced stock outs amid static fixed costs of running on empty shelves.

“Choppies enterprises have agreed to vacate the premises to give way to Tuskys supermarket. Tuskys will move in by the end of October,” Ms Joan Kibui of Nanyuki Mall Limited said in a notice to tenants.

The retailer had stores in major towns including Kisumu, Nakuru, Kisii and Kericho, but the heavy stockouts have hit its business hard forcing it to make some hard decisions.

It sent home over 200 workers in early September days after it emerged that it plans to exit the Kenyan market.

Choppies troubles started after the retailer was suspended from trading at the Johannesburg and Botswana stocks exchanges in November 2018 on account of the company’s auditors PwC’s inability to finalise the 2018 financial statements due to certain irregularities.

The board of the Botswana based retailer met in September and a faction led by former President of Botswana Festus Mogae wanted the retailer to pull out of Kenya and South Africa.

The retailer made an entry into the Kenyan market in June 2015 by buying stake in Ukwala supermarkets.

Choppies bought the majority stake for Sh1 billion and entered into a joint venture with Parin Bharatkumar Patel and Birju Pradipkumar Patel, the two directors of the Export Trading Group (ETG) who also owned Ukwala Supermarkets.

Local minority owners ETG who hold (25 per cent stake) had said they would extend shareholder a Sh600 million loan to Choppies to entice suppliers to resume stocking the retailer sparking speculation they could retake the retailer.