Trouble retailer chain Tuskys supermarket has suffered another blow after the Shiloah branch in Kakamega shut down indefinitely marking the company’s latest retreat in the retail market on dwindling cash flows.
The branch has been in operation since 2018, is situated in Kakamega town. It has been offering fast-moving consumer goods as well as electronics.
“To all our customers, we shall remain closed henceforth. Apologies for the inconvenience,” said the retailer in a notice.
On 23rd October, a high court temporarily stopped the sale of Tuskys asset by its creditors to pay mounting rent arrears, offering a sigh of relief to the struggling retailer.
Today, the High court has extended orders, barring home appliances and electronic dealer from winding up troubled supermarket chain Tuskys over a debt of 248 million shillings.
Justice Francis Tuiyott allowed Tuskys and Hotpoint to continue engaging with a view of settling the matter out of court. The judge had granted the parties 45 days to negotiate. On Tuesday, he heard the parties were yet to reach a deal.
The parties said they were apprehensive of striking a deal and would need more time to settle the dispute.
The supplier urged the court to appoint Kolluri Venkata Subbaraya Kamasastry as the liquidator. In a separate case, Tuskys obtained court orders stopping its creditors from attaching its assets. The case will be heard on November 17th.
The closure of the Kakamega branch is the latest for the retailer which at its peak operated 63 branches in Uganda and Kenya that has increasingly shrunk its geographical spread due to dispute with lands over rent arrears.
Tuskys’ landlords in recent weeks have been slamming the auctioneers’ hammer on the supermarket’s stocks to recover rent arrears.
Auctioneers in the past temporarily closed a Tuskys store at Kisumu’s United Mall over 26 million shillings rent arrears. The branch was, however, reopened for business after the retailer paid 15 million shillings and promised to clear the balance at a later date.
While the supermarket chain’s management blame coronavirus restrictions for its woes, Tuskys has continued to close down more branches. Its financial burden has led to empty shelves on most of its stores countrywide.
The ailing supermarket chain has been facing hard times and is looking to sell a majority stake to raise capital and funds to pay suppliers.