Auctioneers Tuesday shut down Tuskys Supermarket store in Eldoret over Sh14 million rent arrears, highlighting the depth of the retailer’s financial woes.
In an early morning incident, Chargless Auctioneers Limited stopped Tuskys from opening its doors for non-payment of rent over four months.
The closure of stores and auction threats indicate deep cash flow troubles at the giant retailer, which revealed it owes suppliers Sh6.2 billion and is seeking to sell a majority stake in a rescue attempt.
“This is the first time they have not settled the rent arrears. We had given them 14 days but they requested one more week. However, they have failed to honour their agreement, forcing us to shut,” said a representative of the Chargless Auctioneers.
Tuskys has three branches in Eldoret.
The closure of the Eldoret store comes days after auctioneers temporarily closed a Tuskys store at Kisumu’s United Mall over Sh26 million rent arrears.
For months now, shoppers have complained of missing essential goods on the retailer’s shelves, suggesting that some suppliers are severing ties with the company amid a cash crunch, which the retailer has blamed on restrictions imposed to curb the spread of Covid-19.
Tuskys is racing to sell a majority stake to a consortium made up of a private equity firm and undisclosed foreign retailer as part of efforts to raise cash to pay suppliers and win back their confidence and that of customers.
From a humble tiny shop in Rongai town, Nakuru, in the early 1980s, the business has grown into the giant Tuskys, which is the number two player behind Naivas.
But cracks have emerged in the retail chain recently, underlined by the troubles in settling supplier dues on time.
This prompted the competition watchdog in May to order Tuskys to settle overdue supplier debt worth Sh1.29 billion by between July 1 and July 16.
Tuskys became the first major retailer to face the scrutiny of the Competition Authority of Kenya’s Buyer Power Department that was created after then supermarket giant Nakumatt Holdings went under with Sh18.5 billion of supplier debt.
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