Nakumatt had 65 stores in four countries in 2015. By 2019 the chain was gone. What the record shows.
A Kenyan supermarket group that anchored most of the country’s big malls ran out of cash in 2016 and 2017. A business-focused look at what happened and what other retailers can learn.
At the end of 2015, Nakumatt looked like a success. It had 65 stores in Kenya, Uganda, Rwanda and Tanzania, more than 5,500 employees and gross annual revenue above 450 million dollars, with plans to enter more countries. It had also become the anchor tenant in around 75 percent of Kenya’s major shopping malls, according to a 2019 study.
What happened
Serious cash-flow problems began in 2016. The chain could not meet its obligations to landlords, suppliers and staff, and an administrator was appointed. In October 2017 the company ran out of funds and stopped paying rents and wages, and 60 stores closed. In December 2019 the last six branches were sold to Naivas Supermarkets, and in January 2020 creditors voted to liquidate the company.
What other businesses can take from it
- Growth needs cash behind it. New stores, new countries and new malls all cost money before they earn it.
- Being the anchor tenant is leverage in both directions. Mall developers depended on the chain, and the chain depended on being able to pay its rent.
- Watch cash, not just turnover. Revenue was large and rising while cash flow was the problem.
The brand’s legacy is real: it popularised the supermarket anchor model in Kenyan malls. The lesson is about how to grow a retail business so that it can survive a bad year.