Nakumatt| Road To Recovery.

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primezz

Discussion Starter · #3 · Oct 5, 2017

Crane at the NSSF building will definitely start moving anytime now.

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primezz

Discussion Starter · #4 · Dec 10, 2017 (Edited)

Well, all the possible doors to Nakumatt's recovery look like they are almost all shut after Competition Authority of Kenya rejected the proposal to merger Nakumatt and Tuskys. This couldn't be worse possible decision yet on Kenya's retail sector. With the possibility of winding up of Nakumatt, domestic retail sector is becoming a picnic for foreign retailers.

Tuskys is not big enough to take up a reasonable chunk of Nakumatt's void. Naivas growth is not really convincing. Now we will just watch as South Africa's retailer Shoprite comes in, chest high and unopposed with the carpet laid out for them. They will occupy all the premises vacated by Nakumatt. About 26 of them. Many of these are in big malls and very strategic locations that gave Nakumatt the edge over local competition, which also kept these same foreign retailers at bay for many years.

Local players will simply not be able to compete against Shoprite sitting in the same position Nakumatt was, but with a much larger reserve and much more developed structures with both local and international suppliers. While on Naivas and and Tuskys level, there's is Choppies as a direct competition and growing quickly. Not forgetting Game and Carrefour who already laid foundations in very strategic locations and each growing brunch numbers. With the mistrust local suppliers and fanciers now have on doing business with local retailers, Kenya's retail sector is going to be almost a virgin territory for international retailers. Competition Authority of Kenya has just tossed our retail market to the wolves.

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Mwenyekiti

· #5 · Dec 10, 2017

primezz said:
Well, all the possible doors to Nakumatt's recovery look like they are almost all shut after Competition Authority of Kenya rejected the proposal to merger Nakumatt and Tuskys. This couldn't be worse possible decision yet on Kenya's retail sector. With the possibility of winding up of Nakumatt, domestic retail sector is becoming a picnic for foreign retailers.

Tuskys is not big enough to take up a reasonable chunk of Nakumatt's void. Naivas growth is not really convincing. Now we will just watch as South Africa's retailer Shoprite comes in, chest high and unopposed with the carpet laid out for them. They will occupy all the premises vacated by Nakumatt. About 26 of them. Many of these are in big malls and very strategic locations that gave Nakumatt the edge over local competition, which also kept these same foreign retailers at bay for many years.

Local players will simply not be able to compete against Shoprite sitting in the same position Nakumatt was, but with a much larger reserve and much more developed structures with both local and international suppliers. While on Naivas and and Tuskys level, there's is Choppies as a direct competition and growing quickly. Not forgetting Game and Carrefour who already laid foundations in very strategic locations and each growing brunch numbers. With the mistrust local suppliers and fanciers now have on doing business with local retailers, Kenya's retail sector is going to be almost a virgin territory for international retailers. Competition Authority of Kenya has just tossed our retail market to the wolves.

As sad as it appears, it's awfully hard to be sympathetic towards Nakumatt, it's almost as if a five year old was in charge of their core strategic operations for the past decade. I doubt Shoprite will be as quick to enter, though it is not out of the realm of possibility. It's looking more and more like whatever Nakumatt had will end up in the hands of Carrefour or Game, and whatever they don't take up will be divided between Chandarana, Tuskys, Naivas, Choppies, Tumaini etc. Longer term, as Tuskys and co grow larger (if they do), and more profitable there's a high possibility of the retail market undergoing a consolidation phase with Massmart and Al-Futtaim (or whoever else) buying them out. It's bitter sweet, however, if the remaining local competition learns anything from Nakumatt, it should be that there is a certain amount of professionalism required, in fact, demanded as they run their operations. It's no wonder why suppliers and financiers won't touch some of these retail chains, some of the stuff Nakumatt was doing was borderline unethical.

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Snowlion

· #6 · Dec 10, 2017 (Edited)

^^
Beside other problems that could be specific to Nakumatt, the company could simply be the latest victim to a phenomenon that brings down most family-owned businesses. The need to treat the business like " a child /baby in a family" makes those in-charge/shareholders reluctant to employing talent from "outsiders".

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primezz

Discussion Starter · #7 · Dec 11, 2017

Mwenyekiti said:
As sad as it appears, it's awfully hard to be sympathetic towards Nakumatt, it's almost as if a five year old was in charge of their core strategic operations for the past decade. I doubt Shoprite will be as quick to enter, though it is not out of the realm of possibility. It's looking more and more like whatever Nakumatt had will end up in the hands of Carrefour or Game, and whatever they don't take up will be divided between Chandarana, Tuskys, Naivas, Choppies, Tumaini etc. Longer term, as Tuskys and co grow larger (if they do), and more profitable there's a high possibility of the retail market undergoing a consolidation phase with Massmart and Al-Futtaim (or whoever else) buying them out. It's bitter sweet, however, if the remaining local competition learns anything from Nakumatt, it should be that there is a certain amount of professionalism required, in fact, demanded as they run their operations. It's no wonder why suppliers and financiers won't touch some of these retail chains, some of the stuff Nakumatt was doing was borderline unethical.

One thing that greatly contributed to their downfall was miscalculation of their projection? They had a concrete 10 year plan beginning 2010, which was very enticing to investors and PE firms who pumped in millions of dollars to Nakumatt's aggressive expansion strategy. The problem was that the planners incorrectly pegged the projected decade long ambitious growth plans on a Kenyan economy annual growth rate of 10 percent or more, increasing the demand for Nakumatt products and boosting revenues. Kenya's GDP in 2010 was growing at over 8.5%. One can see why Nakumatt thought this was a sound growth strategy, albeit overshadowed by shortsightedness because they should have known better that Kenya's growth cannot be projected beyond a 5 year period because of our toxic elections.

Shoprite has been in talks with property owners to enter premises vacated by Nakumatt. They have only been waiting on the outcome of the merger talks between Nakumatt and Tuskys before they proceed to the next step. Merger plans obviously failed. Now watch as Kenyans start carrying Shoprite bags.

Ironically, Nakumatt not too long ago took over Shoprite's shops in East Africa. Now Shoprite is coming to take down Nakumatt in their own backyard.

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primezz

Discussion Starter · #8 · Dec 11, 2017

Snowlion said:
^^
Beside other problems that could be specific to Nakumatt, the company could simply be the latest victim to a phenomenon that brings down most family-owned businesses. The need to treat the business like " a child /baby in a family" makes those in-charge/shareholders reluctant to employing talent from "outsiders".

I agree. Family should have ceded control of business to professionals and sit in the background with minimal interference. Of course they will always have that power and influence as the owners, just like the Wolton family did with Walmart.

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Mist™

· #9 · Jan 20, 2019

How far has Nakumatt's recovery reached? I hate the way foreign brands are slowly colonising our Malls

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Kenguy

· #10 · Jan 20, 2019

Mist™;155900318 said:
How far has Nakumatt's recovery reached? I hate the way foreign brands are slowly colonising our Malls

I also dont like it. I know im not the only one who feels the Nakumatt void. 24 hour shopping whith every product you need under one roof. Not even the foreign brands have filled those shoes.

I doubt it will ever get back to what it once was. It was the backbone for retail development across the region.

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abckris

· #11 · Jan 21, 2019

Nakumatt abused their dominance. How could a company like that big just recede so fast like that!! It makes no sense.

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Netlink

· #12 · Jan 21, 2019

Kenguy said:
I also dont like it. I know im not the only one who feels the Nakumatt void. 24 hour shopping whith every product you need under one roof. Not even the foreign brands have filled those shoes.

Pray that Walmart doesn't get wind of that otherwise they will jump in there soon and that will be the end of Mom & Pop stores in Kenya. They are however taking their sweet time with developing countries because of the lessons they learned when they rushed into Latin America. They are slowly getting in through the backdoor though like via Massmart. I think they are eyeing all the countries on this list

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Bigbird25

· #13 · Jan 21, 2019

Game stores is run by wallmarts massmart and they have two stores in kenya haha, one in garden city and another getting ready in a mall i saw in one of these new malls they know

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Netlink

· #14 · Jan 21, 2019

I am more worried about Walmart when they leave the mall scene and start building their own stand alone stores. That is when you really see the power of this giant. Malls are mostly high end and Walmart is a low end/discount store. If they decide to come, they won't be Mall anchor stores, they will be competing with the malls.

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Trixx

· #15 · Jan 21, 2019

http://instagr.am/p/%5BMEDIA%3Dtwitter%5D/ [/MEDIA]

Bigbird25 said:
Game stores is run by wallmarts massmart and they have two stores in kenya haha, one in garden city and another getting ready in a mall i saw in one of these new malls they know

Is that so? I went to a Game Store and got that Walmart vibe kabisa. We should protect our own supermarkets and mom and pop shops from these western/eastern multinational companies.

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