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Cash Strapped Deacons Puts Six Of Its Branches On Sale

Troubled fashion shop Deacons has put six of its outlets for sale, as shareholders seem to lose hope with recovery plans.

Among the outlets to be sold include those at Sarit Centre, Yaya Centre, Two Rivers, Village Market, Rwanda and Garden City.

In a notice published on the local daily, the firm says that the outlets are open to “recapitalisation of the company through injection of equity and/or restructure of its debt obligations, or sale of all or some of the store of the company”.

Read: Why Placing Deacons Under Administration Could Sink It, Never To Recover

The company deals with brands such as 4U2, Adidas, Bossini and FNF.

The company, through its administrators Peter Kahi and Atul Shah, has appointed Dyer and Blair Investiments Bank as the transaction advisor.

“Following the submission of the EOIs, Dyer and Blair will shortlist prospective bidders who will be provided with a detailed information Memorandum of the assets and an opportunity to view the assets and subsequently submit financial offers,” reads the notice in part.

Read: Deacons Placed Under Administration, De-listed From NSE

The company was put under administration due to financial difficulties and recurrent losses in November last year, and subsequently delisted from the Nairobi Stock Exchange.

Kahi and Shah were appointed as the joint administrators.

“The primary objective of placing the company under administration is to enable it achieve a better outcome for the creditors than would likely to be the case if the company were to be liquidated,” Deacons CEO Muchiri Wahome said in a statement.

Read: Deacons’ Executive Joe Sitati Kills A Cyclist After Bribing His Way At NTSA

The company reported a loss of Ksh229.5 million in the first half of 2018, as compared to Ksh180.4 million in the same period in 2017. The company attributes its loss to the closure of Mr Price, causing a 20.7 per cent drop in sales.

The company lost Mr Price partnership to a South African company at Ksh133 million, and is planning to close about four stores as it seeks to cut on operation cost.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email francis@kahawatungu.com

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