Regional retailer Nakumatt Holdings has announced plans to close some of its branches across the country in a move to restructure the business and as part of a cost-cutting strategy.
The retailer is aiming at cutting down a total cost of up to 1.5 billion shillings so as to ensure that some of their critical operations have well been streamlined.
With such moves in place, the firm will no longer employ more new staff as it is opting to absorb and progressively deploy staff from recently closed branches to its existing and upcoming outlets. The retailer will also reduce its Store Keeping Unit exposure by retaining items which are frequently purchased and delist those that tend to move slowly.
Nakumatt Holdings Managing Director Atul Shah said that the company has begun a new strategy that has been developed to provide a recovery platform for the firm and replaces the Nakumatt 2.0 strategy which had been developed in 2010 amidst an optimistic economic climate with the domestic economy enjoying a 5.6 percent growth rate and a 4.1 percent inflation rate.
“All indicators then had pointed to a 10 percent growth rate by 2016 with the growth rates and inflation now at 5.8 percent and 6.3 percent respectively, according to the recently released Economic Survey 2017.” Read a statement from the company.
The MD further disclosed that the company will start off by closing down branches whose contracts are yet to be renewed, followed by closure of other outlets that have not been performing well as far as profit making is concerned
Shah went ahead to confirm claims for the closure of their Haile Selassie branch located at KU Plaza, back to Kenyatta University, by the end of this month. Closure of Nakumatt Haile Selassie will be the third to be undertaken by the retailer in recent months following similar developments at its former Nakumatt Ronald Ngala and Nakumatt Katwe in Nairobi CBD and Kampala, Uganda respectively.