After two years at the helm of former retail giant Uchumi, Chief Executive Officer Julias Kipngetich has called it quits. The news of his resignation come as a great surprise given the company had started recording good margins since Kipngetich took over.
Before leaving Kipngetich had secured a strategic investor in a deal expected to bring back the retailer back on its feet.
Chief Financial Officer Mohammed Ahmed Mohamed has been named as the acting CEO as the Board seeks for a suitable CEO.
“The board remains committed to execute a turnaround strategy aimed at ensuring the company’s return to profitability. The board further takes this opportunity to thank Dr. Kipngetich for his dedicated service to the company during his tenure and wish him all the best in his future endeavors,” said Uchumi Board Chair Catherine Ngahu in a statement.
The former Kenya wild life service Director had assured shareholders and members of the public that the listed retail chain will be stable in the next 100 days when he took over.
But after two years the firm is still struggling to pay its debts to suppliers while many stores both in Kenya and regionally continue to be closed.
Kipngetich was implementing a franchise-model of business that would have seen the firm outsource some services to a franchise that includes outlets, stock, distribution centres and logistics among others.
“We will share the stock (I supply to them, they stock, I give them a fair price), we share the distribution centres like warehouses but we deliver to the customer as the lowest value possible and we become truly the Uchumi that was originally meant for Kenya in 1976,” he had explained.
Kipng’etich had stated that it has not been an easy road, at least not what he expected when he took over.
“Uchumi has come a long way since I have been here. It has been a tough journey. When I arrived we had to figure out the state of the company, we realized that the books were not sitting well, many suppliers had stopped supplying. We drafted a rescue plan that needed urgency but unfortunately, things never moved as fast. That include land sales, which has slowed down the turnaround of the company,” he stated.
Uchumi Supermarket cut their losses by 40 percent in the 2017 financial year to Sh1.7 billion compared to Sh2.8 billion loss in 2016 attributed to improved cost management.
Expenses went down by 42 percent in the period under review from Sh3.6Bn in 2016 to Sh2.1Bn in 2017 while the cost of sales hit Sh2.5bn from Sh6.4bn in 2016.
The firm says that despite the suppressed business in the current and past financial year the firm recorded improved margins.
“The board and management continued to implement initiatives aimed at recovery and turnaround in performance including streamlining operations, strengthening management, and implementing improved operational processes,” said the Board.
Former Nakumatt Chief Marketing Officer Andrew Dixon was appointed as the COO early November after the resignation of Willy Kimani who is now the Chief Commercial Officer at Naivas.