South African retailer Shoprite is downsizing its operations in Kenya and plans to close or dispose off its remaining stores as the business has slowed down in the wake of the coronavirus pandemic.
According to its financial results for the year ended June 28, the retailer says, “Kenya, with three stores at year-end, has continued to underperform relative to our return requirements. Post-year-end, one store has been closed.”
“Given the ensuing economic impact of COVID-19 and our experience to date, we expect to close or dispose of our remaining two stores in the region in the year ahead,” the company said.
In addition, the retailer disclosed the Kenyan business took out a loan of 238 Million rands ( KSh 1.5 Billion) from Stanbic Kenya, an unsecured loan, payable in 21 months, and bearing an interest rate of 9.7 percent.
In April and August, it shut its Waterfront Karen and Nyali outlets. The retailer has been left with The Hub, Karen Crossroads, and Galleria, whose sizes are 322,917 SQFT, 85,035 SQFT, and 158,229 SQFT, and was opened in 2016, 2005, and 2011, respectively. In addition to its branch at Westgate, Garden City mall.