The analysts from Cytonn Investments say that the retailer’s ability to bounce back is unpredictable having failed to stabilize its operation.
This is even after the local chain alleged to have received Sh500 million in September 2020 to pay off landlords, suppliers, and facilitate other immediate working capital requirements.
The sentiments come after the firm shut down more of its branches in the past month and is tussling with auctioneers in court to return its seized stocks.
On 3rd November, 2020, Tuskys returned to court to confirm whether an auctioneer who seized some of its goods has returned them as ordered by a judge.
Justice Francis Tuiyott had on November 26 directed Makuri Auctioneers to return the goods within seven days.
The retail chain moved to court seeking to have Joel Musya of Makuri Auctioneers and Pietro Canobbio committed to civil jail for disobeying a court order, directing auctioneers not to seize the Tusky’s goods, pending the determination of the petition.
In October, Justice Tuiyott barred the supermarket’s creditors and auctioneers from attaching its assets. The judge, however said the order does not affect Greenspan Ltd, which has sued the retailer over rent arrears.
“Having read the affidavit of Patrick Ogola sworn on 16th October 2020, I hereby order a stay of any attachment, sequestration, distress or execution against the property of the company pending further directions,” Justice Tuiyott said.
Tuskys later went back to court saying there were threats to seize and auction its go-down in Komarock, which holds its stocks and tools of trade and selling them would jeopardise plans of reviving the supermarket. There were also threats to auction goods at Oasis Mall in Malindi.
In October and early November, the supermarket chain closed 4 branches namely; Tuskys Magic branch in Nakuru Town, Tuskys Pioneer on Moi Avenue Street in Nairobi, Adams Arcade branch on Ngong Road, the Kitengela branch and Shiloah branch in Kakamega.
Since it entered murky waters, the retailer has reduced the number of operational outlets to 50.
The chain, which was at one time one of Kenya’s largest retailer, has now shut down 14 branches this year.
Tuskys has been battling financial woes amid supplier debts and mounting rent arrears despite securing financial support amounting to Sh2 billion from an undisclosed Mauritius-based private equity fund in August.
In October, the retailer got reprieve as the High Court barred Hotpoint, a home appliances and electronic dealer, from trying to dissolve the troubled chain, over a Sh248 million debt.
“A significant infusion of significant equity capital by a strategic or financial investor is the way to go,” the analysts said.
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