Uchumi Supermarkets has gone silent on its plans to recover from a franchising model complicating its recovery efforts.
The firm supervising the retailer’s company voluntary agreement plan, says the firm has been quiet on the franchising strategy that was agreed on years back.
The firm says in the latest supervisory report on Uchumi that
while progress has been made, including settling about 82 percent of the old debts, not much activity has been seen on either the franchising model or convincing the government to rope the retailer in its plans.
“There is however a concern that the new business model of franchising and engaging the government for inclusion on its economic transformation agenda appears to have been relegated if not dropped by the management altogether,” reads Mazars report released following a virtual meeting with creditors on the last day of February where it discussed the progress and the unfinished business in the attempts to revive the retailer’s fortunes.
The lack of progress on the franchising idea saw Uchumi post revenues of Sh31 million— or a monthly average of Sh5.2 million— in six months ended December last year compared with the Sh56 million that had been projected.
Declining sales and rising amounts of debt had taken a toll on Uchumi’s financial health thereby limiting its ability to continue operating effectively as a going concern..