Nakumatt Supermarket’s presence in Tanzania has been reduced to a single outlet after the struggling retailer was evicted from a building in Moshi for failure to pay rent for over a year.
The retail chain was on Friday forced to close its store following rent arrears of an unknown amount.
It is the retailer’s third store to shutdown in Tanzania in as many months. Nakumatt’s remaining branch in Tanzania is located in Dar es Salaam.
Nakumatt, which is battling to keep its heavily-indebted business operational amid a push by creditors for its liquidation, in October closed its outlet in Dar es Salaam also due to rent arrears and failure to adequately stock the store. Last month, the family-owned business closed its Arusha branch.
Thadey Mariki, the estate manager of Erncon Holdings Ltd, Nakumatt’s landlord, confirmed the eviction but declined to state how much the financially-strapped retailer owes.
“We had to other option but to evict them. They haven’t paid rent for more than a year now,’’ he said, adding that the retailer was inconveniencing Erncon business plans
Nakumatt was expecting a six-week phased injection of Sh7.7 billion from an unnamed private equity fund beginning March, but failure to secure the funding has caused widespread product stockouts and seen it delay employees’ pay.
The retailer’s financial woes have worsened as the year progressed with several outlet closures in Kenya and Uganda, leaving Rwanda as the only market seemingly immune from the financial meltdown.
Nakumatt had planned to merge with its rival Tuskys in order to salvage the ailing business, but the Competition Authority of Kenya (CAK) recently rejected this proposal.
The Nakumatt-Tuskys deal is also facing objections from a key Tuskys shareholder.
“We are being evicted. I am not at the scene but I have just been informed that the branch is being closed,” Alfrick Milimo Nakumatt Moshi’s branch manager, said during a telephone interview.