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The non-quitter who founded Nakumatt Supermarkets

By | Published Tue, May 31st 2011 at 00:00, Updated Tue, May 31st 2011 at 00:00 GMT +3

By Kenneth Kwama

The man who founded Nakumatt Supermarket, started out with a small shop in Embakasi, Nairobi, but turned the business into a retail chain colossus after undergoing several tribulations, including a bankruptcy that temporarily forced him to shut down to join his brother’s business as a casual worker.

Mangalal Shah’s entrepreneurial journey that led to what would later become Nakumatt started when his family immigrated to Kenya from India in 1947. He set up a small shop in Embakasi to serve the many workers who were toiling in quarries around the area at the time, but later left for Kisumu to search for greener pastures.

One of Nakumatt’s branches in Westlands, Nairobi. Inset, Atul Shah, the chief executive officer of the chain. [PHOTO: FILE / STANDARD]

His quest for better business opportunities led him to shift from the lakeside town to Elburgon and later, Nandi Hills. It is while he was in Nandi Hills in 1961 that one of his two sons, Atul Shah who is the current chief executive of Nakumatt was born.

Four years later, 1965 to be precise, the family shifted to Nakuru and set up a clothing store opposite the Nakuru open air market. Shah named the shop Vimal Fancy Store, after his first born son. The business started well and in 1970, the founder’s first born son, Vimal Shah joined in.

The clothes business was so successful that in 1972, the pair opened another clothes business. Shah named the second shop, which was located on Nakuru’s Kenyatta Avenue, Tiku Fancy Store, after his youngest daughter. It became an instant hit with customers and in 1973, father and son decided to close the first shop to concentrate their efforts in the new entity.

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"It used to sell ready made garments from Kenyan manufacturers. Those days, people used to wear locally manufactured clothes because there were no imports. Kenya had over 100 local manufacturers, including Rivatex and Raymonds. It’s a pity the number has reduced to around three now," says Atul.

Atul drops out of school

The family was so awed by the booming business that the young Atul, who had just completed his primary education, convinced his father to let him drop out of school to help run the family business. Shah, who was desperate for an extra hand in the business yielded to this strange request and as a result, Atul temporarily dropped out of school for nine months before he was forced back by other family members.

By 1975, the business had become so successful that Shah was convinced he should diversify. He started exporting ready made clothes and materials to Uganda. Along the way, the entrepreneur gained popularity among traders but started a trend that would later make life difficult for him and his family.

Close shop

Towards the end of 1976, the entrepreneur had given out a lot of goods on credit, but his benefactors were not quick to return these favours. Most of the people he had supplied goods on credit disappeared and as a result, Shah became bankrupt and closed his once thriving shop.

According to his son, Atul, by the time the founder of Nakumatt folded his once thriving clothes enterprise, he had accumulated debts estimated at around Sh1.2 million.

With the debts over his head and desperate to find a way to fend for his family, Shah found reprieve after he was employed by his brother Hasmukh who was then running a shop called Nakuru Mattresses.

While their father was working for his brother, his two sons-Vimal and Atul opened a small shop where they used to stitch and sell bed sheets. The two named their shop Furmatts.

The business got much needed boost in early 1978 when what was then referred to as the ‘coffee boom’ hit East Africa. The price of coffee, which was the major export of the region rose phenomenally in the world market, leaving many farmers in Kenya and Uganda, which were Shah’s primary market, with a lot of disposable income.

Sales up

Then, a trouser was retailing at a standard Sh20, but the farmers and many other workers who had benefited from the coffee boom and the ensuing good life made sure they flew out the shelves in thousands.

Sales went up and by June of the same year, the two brothers had managed to pay off Sh300,000 of their father’s Sh1.2 million debt. Together with their father, they joined hands and bought Nakuru Mattress from their uncle, Hasmukh who later moved to UK.

"Business was so good that by the end of 1979, we had paid off all the debts that my father had accumulated," laughs Atul.

With the yolk of debt removed from their backs, the three started to diversify their product range. Besides the mattresses and clothes, they started importing other retail products like sufurias, umbrellas and plastic basins.

By 1982, Nakuru Mattresses and Furmatts, which were then operating as a unit had the largest variety of retail goods in Nakuru. They opened the first store outside Nakuru in Eldoret in 1984. Two years later, the family opened their first store in Nairobi on Ukwala Road-behind the Bus Station, paving way for a phenomenal growth that has seen it open 32 branches in Kenya, Uganda and Rwanda.


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