Well known companies that collapsed during the year were once giant retailer Tuskys, Intercontinental Hotel, Shoprite and Choppies. We take an in depth look on what led to their failure.
Choppies Enterprises Ltd exited the East African market from the South in January with debts amounting to facing $12.4 million (KSh 1.4 billion).
The East African reported the debt was owed to banks and suppliers in Kenya and Tanzania.
In Kenya, it had borrowed KSh 300 million from ABSA Bank formerly Barclays Bank Ltd.
South African retailer Game Store is owned and operated by Massmart and had its doors opened in Kenya for five years until September 2021 when it shut down.
The supermarket,which had branches in Kenyan cities, chain has been registering losses running into billions thus a decision by the management to close shop in Kenya.
The store had outlets in Nairobi’s Garden City Mall, the Waterfront Mall in Karen and Mega City Mall in Kisumu. Its closure follows that of other retailers like Nakumatt, Shoprite, Choppies and Tuskys, but new players like Quickmart were expanding rapidly across the country.
3. Shoprite Kenya
International retailer based in the US,Shoprite, joined the Kenyan market in 2018, hoping to cash in on what seemed like a bustling economy.
Two years later, the supermarket chain was counting KSh 3.2 billion in losses and ending its operations in the country as the massive losses really affected its running.
Shoprite had outlets at Garden City, Westgate Mall, Karen and Nyali, Mombasa. In December 2020, the management sent a redundancy letter to its employees reiterating that endeavours to continue trading in Kenya was no longer viable before completely shutting down in January this year.
Tuskys was a Kenyan supermarket chain. It was one of the large supermarket chains in the Great Lakes Area. It employed nearly 6,150 people, 6,000+ in Kenya, and 150 in Uganda.
As of August 2018, Tuskys owned and operated sixty supermarkets in Kenya and Uganda. Tuskys employs more than 6,000 people in Kenya. As of July 2018, Tuskys had closed four stores in Kampala, Uganda and remained with three stores in Kampala.
t its peak, the Kenyan supermarket chain was one of the largest in the Great Lakes Area. It employed over 6,000 people in Kenya and 150 in Uganda.
Some of the reasons that contributed to the collapse of the multi-billion supermarket, which had several branches in major towns, include sibling rivalry, internal fraud, aggressive debt-fuelled expansion and fierce competition.
By August 2020, it had accumulated debt worth KSh 6.2 billion owed to suppliers and creditors. Despite entering a KSh 2 billion agreement with a Mauritius firm to ward off financial constraints, the closure of its last branch in Nakuru in January ended its existence.
5. Intercontinental Hotel
InterContinental Hotel in August announced plans to end its lease agreements with KHP, the holding company for the five-star hotel, and shut down the facility amid the coronavirus economic fallout.
The hotel had employed the services of auctioneers to sell some of its properties, including vehicles, carpets, bedsheets, televisions and kitchen equipment. In August 2020, Inter-Continental Hotel Corporations Limited made public its plans to permanently close down business in Kenya and fire all its staff.
The management cited “operational reasons” as the base behind its intention to shut down its renowned hotel that it has been running under a 99-year lease since April 1967. The state owned a 33.8% stake in Intercon, while Sovereign Group is the largest individual local investor with a 19.2% stake. The Development Bank of Kenya controls a 12.99% stake.