Tuskys Kisumu reopens after retailer pays Sh15m of Sh26m rent arrears
Shoppers are pictured at Tuskys' United Mall branch in Kisumu on August 21, 2020, following its reopening a day after closure over rent arrears amounting to Sh26 million.
What you need to know:
- The branch, one of the largest and most popular, was closed on Thursday following the chain’s failure to pay Sh26 million in rent arrears.
- Out of the total amount owed, Tuskys paid Sh15 million and promised to clear the balance on Monday.
- The Kisumu outlet’s closure was another indicator of deep cash flow troubles at the giant retailer, which owes suppliers at least Sh6.2 billion and is seeking to sell a majority stake in a rescue attempt.
Tuskys has reopened its United Mall outlet in Kisumu County after quickly resolving its Sh26 million rent dispute that saw auctioneers take over.
The branch, one of the supermarket's largest and most popular, was closed on Thursday following the chain’s failure to pay that amount in rent arrears.
In the matter of distress for rent, the mall’s owner asked Victoria Blue Auctioneer Services to sell by public auction assorted products belonging to Tusker Mattresses Limited starting next Friday at 10.30am.
Out of the total amount owed, the Nation established, Tuskys paid Sh15 million and promised to clear the balance on Monday.
“Kindly note that Tuskys has sent us a proof of payment for rent arrears up to the end of July. Kindly confirm receipt of the same,” Felix Apollo Owuor from the auctioneer said in a letter to the advocates representing United Mall.
“Please, note that we have to immediately open the supermarket since the attachment only took place for the arrears. Should there be any default for the August rent, kindly proceed to issue fresh instructions to enable us issue a fresh proclamation.”
Cash troubles
The Kisumu outlet’s closure was another indicator of deep cash flow troubles at the giant retailer, which owes suppliers at least Sh6.2 billion.
In a race to prevent collapse, Tuskys is seeking to sell majority stake to a consortium made up of a private equity firm and an undisclosed foreign retailer.
On Thursday evening, Tuskys Chief Executive Officer Dan Githua sent a statement to newsrooms, saying the United Mall rent dispute had been resolved.
He said the branch would be restocked ahead of the reopening that took place on Friday afternoon.
“We assure our stakeholders that we have resolved the misunderstanding with the landlord, who has been a long-term partner,” said the CEO.
“The branch has since resumed normal business operations. We regret any inconveniences caused to our esteemed stakeholders.”
He added that they were in the process of securing a long-term strategic partner.
For months now, shoppers have complained of missing essential goods on the retailer’s shelves, suggesting some suppliers severed ties with the company amid a cash crunch, which it has blamed on Covid-19 restrictions.
