Tuskys re-opens former Ukwala Tom Mboya branch after court order

Corporate News

Nairobi residents outside Tuskys Supermarket on Tom Mboya Street, formerly Ukwala Supermarket, which reopened yesterday. PHOTO | DIANA NGILA | NATION MEDIA GROUP  NATION MEDIA GROUP

By VICTOR JUMA

In Summary

• The Ronald Ngala outlet, which remains closed, is expected to re-open after completion of ongoing repair works, according to staff of the retail chain.

Tuskys Supermarket yesterday re-opened its Tom Mboya branch after receiving temporary court orders allowing it to open two outlets that it acquired from Ukwala Supermarkets.

A court order last week overturned the Competition Authority of Kenya’s (CAK) directive of July 30 that saw Tuskys shut down the Tom Mboya and Ronald Ngala street branches. The Ronald Ngala outlet, which remains closed, is expected to re-open after completion of ongoing repair works, according to staff of the retail chain.

Tuskys had taken over the two outlets from Ukwala, targeting to buy out a total of six branches of the family owned business. CAK however amended the scale of the acquisition, ordering Tuskys to leave out five Ukwala outlets including Tom Mboya and Ronald Ngala branches which it had already taken over management and daily operations.

This meant that Tuskys could only buy out Ukwala’s Jogoo Road branch. Tuskys is however challenging CAK’s decisions, with its legal battle against the regulator resuming on October 14.

Tuskys and Ukwala are to file a motion seeking to overturn CAK’s ruling. The regulator was also ordered to refund a Sh5.3 million fine imposed on the two retailers for initiating the acquisition process without seeking CAK’s clearance.

The controversial acquisition has put the jobs of tens of Tuskys and Ukwala’s employees at risk. The five branches that Tuskys intended to acquire include Ukwala Hyper, Hakati and Haile Selassie outlets.

Tuskys had already started integrating the Ukwala stores in its operations including their human resource function, with the retailer seconding some of its employees to the new units.

CAK reckons that an unconditional buyout of the six outlets would result in Tuskys’ market dominance and reduced competition in Nairobi’s retail sector. Tuskys is the second largest retailer in the country after Nakumatt Holdings.