Retailer's death grim lesson - Daily Nation

Tuesday will mark the end of the existence of a business entity that was for many years one of the best examples of Kenyan enterprise and one of the largest and most successful private companies in the East African region.

Creditors will vote to dissolve the former giant regional retailer.

This is the culmination of the failed efforts to revive the firm. Once a major brand that was a source of regional pride, it will, unfortunately, now just remain an example in the study of the history of the development of commercial ventures.

The January 7 meeting will, rather sadly, close the chapter of a brand name that once enjoyed recognition and pride of place in the capitals of the East African Community member states and beyond.

Creditors, including banks, are owed a whopping Sh38 billion and yet the six branches that have been sold to another retail chain have yielded only a miserly Sh422 million.

An effort by a court-appointed administrator to help the retailer to correct its mistakes go back to the drawing board for a recovery strategy has totally failed.

Since early 2018, when the retail chain sought protection from its creditors to try and get a new lease of life, nothing much has happened.

Its branches in the other EAC member states have been shut and goods seized, as have the majority of its Kenyan outlets.

In 2017, it had 60 branches, dropping to just six in September 2018.

A combination of factors, including gross mismanagement, poor strategic decisions, tax issues and massive internal losses perpetrated by wayward employees and suppliers, have been cited as the main reasons behind the death of giant supermarket chain.

Its rapid expansion compounded its management challenges, thus intensifying internal thefts and collusion with crooked suppliers to force the retailer to its deathbed. Nakumatt's woes mirror those of another major retailer, Uchumi, which has for years struggled to stay afloat.

The lesson from Nakumatt's collapse is the need for prudent management and monitoring to safeguard investments.

A forensic audit must now be carried out to establish who did what in the wake of claims of possible culpability by management in the collapse.