BUSINESS: Uchumi's new terms for tenants

Leah Wanjiru

All Uchumi tenants who were evicted in September, will get their shops back but on new terms.The retailer  wants contracts of the specialty stores operators reviewed to set terms for sharing fixed and varied costs of running the retail chain.The tenants, will no longer sell foods and some products which Uchumi sells to avoid competition.

The parties will have to agree on merchandising standards and store designs.In a statement sent to newsrooms on Tuesday, Dr Kipng’etich said they had agreed to return the ‘shop-within-a-shop’ concept but would work out modalities agreeable to the two parties.In August, the retailer served tenants with a month’s notice to vacate the stores after the exit of its former boss Mr Jonathan Ciano.

Uchumi blamed the former management for unfavourable contracts with the dealers, stating that the space could be used in a better way.The more than 100 medium-sized businesses which rely on the traffic associated with Uchumi’s brand to make sales took the matter to court stating the notice was short and likely to cause them losses.Uchumi then asked the High Court to order for an arbitration settlement for the case stating that their contract terms barred the shops from going to court before trying to talk things out.

Reports indicate that Uchumi planned to bring in international brands to replace the current tenants who sell a wide variety of merchandise such as clothes, electronics and food.Dr Kipng’etich now says both Uchumi and its partners will adopt a joint marketing plan to boost sales financed through a cost-sharing model.Uchumi, which is recovering from a Sh3.2 billion loss for the year ending June, has set out plans to improve its capital including the sale of Ngong Hyper, Lang’ata and 20 acres at Kasarani to raise sh3.6 billion.The recovery plan has also included staff cuts and closure of loss-making subsidiaries is also expected to save the retailer Sh70 million every month.