Supermarkets retail chain, Uchumi, has re-kindled a cautiously crafted growth and expansion strategy buoyed by improved cash flow.
The company has so far opened three branches in Uganda; one in Tanzania, two in Kenya, and another store would be opened in Nairobi’s Ongata Rongai town in the next one week.
This comes barely three years after the retail chain emerged from receivership following an ambitious expansion plan that went bust.
“We were put under receivership because we were insolvent but within four years we had repaid all the Sh2.4 billion owed to our creditors,” said Jonathan Ciano, the company’s managing director.
Six years later
Ciano was speaking in Nairobi during an event designed to celebrate the company’s milestones, six years after re-opening.
Ciano, who revived the company after it was shut down for a month in mid-2006 due to insolvency, commended the co-operation by the suppliers, landlords, commercial banks, customers and the Government during the company’ s dark period of financial distress.
“Our expansion is still continuing using our internally generated funds. Our growth has been made much easier through special arrangement with developers,” he said, adding that Uchumi stands to benefit immensely from the new outlets.
The retail chain expects sales to rise to Sh16 billion, up from Sh3.8 billion in its 2011/2012 year ending this month.
“In the coming financial year we expect our sales to increase by another Sh4 billion, driven by the maturity of the Greenfield branches we have opened,” he said. Ciano said the company was looking to expand into new geographical markets within the east African region.
The company’s shares were suspended from trading on the Nairobi Securities Exchange following Uchumi’s closure on June 1, 2006, after a poorly-funded expansion plan left it with a Sh1.2 billion loss and debts of more than Sh2 billion owed to suppliers, KCB and PTA banks.
And when the creditors – KCB and PTA banks – handed over the retail chain back to its owners, Mr. Ciano’s prime aim was to return Uchumi back to the Nairobi Securities Exchange and to continue growing its branch network.