Struggling retail chain Nakumatt Holdings has closed its Prestige and Lavington branches in Nairobi.
Naivas Supermarket will take over the two branches.
“Naivas Prestige will be open very soon and we look forward to your support. Sorry for any inconvenience caused,” read a notice from the management.
In November, it closed its Kisumu branch located at Megacity Mall, leaving the retailer with just five remaining branches countrywide.
With the Prestige, Kisumu, and Lavington closures, it has been left with its Nakuru and Nairobi’s Highridge and Mega branches.
“The retailer’s woes are mainly due to unique challenges in strategy and governance as well as financial constraints because we continue to see other brands like Quickmart, Naivas, and Carrefour continue to open branches. Such closures have also allowed international retailers to expand their local footprint as they take up vacated spaces, thus, cushioning developer returns in the sector. ,” according to Cytonn Investment.
Nakumatt’s closure follows the entry of South Africa-based retailer, Game, which set up shop at Mega City Mall earlier in 2019.
The formal retail market in Kenya has grown exponentially in the past three years and remains vibrant with supermarket chains expanding beyond Kenya’s boundaries.
“We, however, expect the closures will manifest through the decline in rental yields due to the increased vacancy rates in affected nodes, such as Ngong Road and further expansion by international retailers such as Shoprite and Game as they move in to fill the vacuum left by Nakumatt,” adds Cytonn Investments.
