In a last minute deal to save the troubled retailer, Tuskys has reportedly reached an agreement with Nakumatt to take over its management. The two chains will however remain as separate entities. Nakumatt has in the recent past faced a cash crunch which has seen it unable to pay its creditors a situation which has led to closure of some of its branches and bare shelves in others.
As part of the deal, the Atul Shah family which has maintained a tight grip on the retailer will step down and pledge their shares to the financiers for a 6-week period according to reports. My assumption is that the stepping down of the family was key to the deal as the mismanagement of the chain happened on their watch.
With the deal in place, Nakumatt will now access stock from suppliers using the Tuskys supermarket goodwill and value chain. This will go a long way in helping the chain restock as suppliers had shied away from supplying them due to mounting debts.
Being that Tuskys and Nakumatt are already the country’s largest retailers, the deal is expected to be scrutinized by the competition authorities.