South Africa’s luxury fashion brand Woolworths has closed its Thika Road Mall (TRM) store in Nairobi, citing poor sales.
Woolworths attributed the depressed volumes to the fact that the shopping complex did not serve its target market, as well as cannibalisation from its more recent store at nearby Garden City Mall.
“The truth of the matter is that TRM was always tiered lower than our target market,” Woolworths district manager for East and West Africa Caroline Musei said in an interview.
“However, when we opened a bigger store at Garden City, most of our customers shifted to the new outlet leading to a drop in sales. That is why we decided to close our TRM branch.”
Ms Musei further blamed the subdued business at the TRM on the financial problems facing the mall’s anchor tenant – Nakumatt Supermarkets – saying it had also depressed sales for other tenants due to reduced foot traffic.
Despite this setback, Woolworths last month opened two new stores — at The Hub in Karen and Two Rivers Mall, bringing the businesses’ total store count to 11.
Other Woolworths stores are at Sarit Centre, Yaya Centre, Village Market, Galleria Shopping Mall, Junction Mall, Thika Mall, Nyali Mall (Mombasa) and West End Mall (Kisumu).
Deacons was initially the local exclusive franchise holder of the Woolworths brand of clothes but the South African firm in 2012 decided to distribute its merchandise through a joint venture called Woolworth’s Kenya Proprietary Limited.
Woolworths took a controlling 51 per cent stake in the joint venture, leaving Deacons with a 49 per cent equity and management rights in the new outfit. The multinational last year bought out Deacons, taking full control of the business.
Deacons reported a net loss of Sh278 million for the year to December compared to Sh100.6 million in 2015, saying this drop was due to a depressed trading environment.
The retailer earlier this year closed its Angelo branch at Sarit Centre in Nairobi and retrenched five senior managers as part of a restructuring process it has been undertaking.