Uchumi sued for Meru branch rent arrears

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An Uchumi outlet
An Uchumi Supermarket outlet. PHOTO/COURTESY

By Edna Mwende

Uchumi Supermarket has been sued by the City Square Properties Limited on their Meru County branch for the amount of Ksh23.8 million rent arrears spanning over 21 months.

The lawsuit according to a news report by Business Daily spells doom for the cash strapped retailer with the clear indication that they are about to lose a second branch in only three months.

The retailer has therefore been closed for the last two weeks as reported by the local daily for lack of stock and failure to pay its employees despite the management maintaining that they are still running.

“The respondent is in arrears in respect of the said business premises erected in Meru County for over 21 months and the said rent arrears now stands at over Sh23.8 million as at February 2019, the applicant therefore continues to incur financial losses on account of lost respect in respect of a lease…,” City Square Properties is quoted as having said in a document filed at the High Court by the Business Daily.

Business Daily further reports that City Square Properties is seeking to have the lease terminated accusing the retailer of failed to stick to the agreement.

This will be the second outlet to close down since the end of last year after they lost the Ngong Hyper branch.

The struggling retailer’s CEO Mohamed Mohamed told the Business Daily in December that Uchumi still holds the building tenancy and the shutdown is short-term. The retailer had at the time intermittently opened and closed the branch.

Over the years the supermarket has been incurring losses and has not been able to pay their suppliers on time as well as meet their rent obligations.

Uchumi, which owes suppliers over Sh3.6 billion, has been banking on the sale of the land to turn around its fortunes but the money has been slow in coming because of challenging approval processes. Over the past four years, the retailer’s branch count has dropped from about 40 to less than 10 owing to its cash woes.

ALSO READ: Uchumi Supermarket closes Meru branch

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