Choppies Supermarket chops its Kenyan Business

The Botswana-based supermarket chain, Choppies Enterprises, has put up for sale its trade equipment and property in Kenya weeks after scaling down its more than 15 local stores to two, saying that the proceeds will help to pay off some of its debt.

“Operations have since been scaled down to only two stores and negotiations are ongoing to sell equipment to local operators and/or existing landlords to clear some of the outstanding liabilities,” said the Botswana Stock Exchange-listed Choppies in a circular to shareholders.

Recently, Choppies fired 583 workers, 486 in November 2019 while 97 others left months earlier, as it struggled to stay afloat amid strained cash flows and heightened competition in the Kenyan market.

According to court documents “486 employees were declared redundant by a notice dated November 15, 2019…51 employees were declared redundant at Nanyuki by notice dated October 31, 2019, while 46 employees exited employment for other reasons other than redundancy.”

Choppies and the Kenya Union of Commercial Food and Allied Workers are embroiled in a court battle over fears it may quit Kenya without settling dues of the laid-off staff.

The move comes five years after Choppies acquired Ukwala stores for Sh1 billion as a launchpad to East Africa.

The retailer informed shareholders that its incapacity to access loans led to stock-outs in the Kenya operations, which posted a loss of Sh248.7 million in the delayed 2018 results. It has already written off Sh1.6 billion from the local subsidiary.