Nakumatt will be forced to close its flagship Mega branch, which is the company’s most profitable branch and an instrumental part of the so-called “Nakumatt BounceBack” program. Mega occupies 16,250m² of retail space alongside Nairobi’s Uhuru Highway.

Rent arrears have forced the closure of Nakumatt’s Mega branch, its flagship store in Kenya. The branch will officially close at the end of September. It leaves the company with three stores in Rwanda and five stores in Kenya: Prestige, Lavington, Embakasi, Mega City (Kisumu) and Nakuru. The company’s Ukay branch in Westlands, Nairobi, was demolished in August. All of Nakumatt’s stores are under administration.

Nakumatt’s Mega branch was established in 1991 and was the company’s most profitable outlet, ahead of its Junction Mall branch (now a branch of Carrefour). Nakumatt Mega posted revenues of Sh12.7bn ($126.2m) in the three years to February 2017, according to information provided by Nakumatt’s administrator, Peter Kahi. At its height, the Mega branch grew from 370m² to 16,250m², opened 24 hours a day and stocked more than 55,000 SKUs.

With Nakumatt’s largest retail space in its network, Mega was the critical piece in the so-called “Nakumatt BounceBack” recovery plan proposed by the administrator. That plan, which involved putting 25,000 SKUs on promotion to generate cash flow, was always a highly ambitious last gasp play. It is now effectively dead, and with it almost any chance of Nakumatt’s creditors recouping their losses. Expect to see secondary distress among some of the retailer’s major suppliers.