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Now Nakumatt snubs external financing.....

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VituVingiSana		#11 Posted : Thursday, June 10, 2010 9:34:39 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		@sasha - When I was in the USA... the suburbs had large stores but the city/CBD had small stores which concentrated on selling FAST MOVING CONSUMER GOODS (FMCG)... Nakumatt already has Lifestyle with parking for big items... lakini the TARGET market for these 'small' stores is the office worker who needs a few items they can carry when they take matatus/buses or share a car! These stores are not for large ticket items... plus parking in town to go shopping is no longer feasible or convenient... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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Sasha		#12 Posted : Thursday, June 10, 2010 9:57:28 AM
Rank: Veteran Joined: 9/5/2007 Posts: 627		@VVS: Makes sense, but I was of the impression that office workers mainly go to Tuskys which you will find near every stage. Can the customer traffic support the business in the long-term? Tuskys have also taken up this strategy of big malls in the suburbs. I hope Mukuha knows what he is doing.
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VituVingiSana		#13 Posted : Thursday, June 10, 2010 10:54:28 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		Sasha wrote: @VVS: Makes sense, but I was of the impression that office workers mainly go to Tuskys which you will find near every stage. Can the customer traffic support the business in the long-term? Tuskys have also taken up this strategy of big malls in the suburbs. I hope Mukuha knows what he is doing. I think Nakumatt is competing with Tusky's in CBD. Note that Nakumatt might be suited to the guys with cars, etc... but there is a lot of overlap... Remember the old Uchumi - Market Branch (near Jamia)? It is now Tuskys Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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My 2 cents		#14 Posted : Thursday, June 10, 2010 12:12:22 PM
Rank: Veteran Joined: 6/2/2010 Posts: 1,089		@Vituvingisana...just to refresh your memory, before the talk of private financing, Nakumatt had indeed talked about an IPO. Check old records. The bear market made this option unattractive. And who says that by going public you necessarily cede control? You yourself have given the example of BH. Nakumatt has a lot to gain (PR -wise)by being viewed as a truly local company and they try to play this up in the adverts. If I were the MD of Uchumi I would really belabour on the fact that we are 'local' and have the mwananchi as shareholders as opposed to some tightly family controlled outfits.
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Obi 1 Kanobi		#15 Posted : Thursday, June 10, 2010 1:13:19 PM
Rank: Elder Joined: 7/23/2008 Posts: 3,017		Ramamurthy lost his footing at some point and thats what even led to his dismissal. Atul looks more poised and should steady the company as the aging founders try to decide on a succession plan. I suspect Nakumatt is suffering from the Asian business syndrome, where the grandfather creates the nucleus, the son's grow and mordernise it but the grandsons opt to live in the UK, Canada, US or Singapore and only call to ask for their monthly allowances. They will eventually sell, just like CFC did. "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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VituVingiSana		#16 Posted : Thursday, June 10, 2010 8:08:36 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,349 Location: Nairobi		My 2 cents wrote: @Vituvingisana...just to refresh your memory, before the talk of private financing, Nakumatt had indeed talked about an IPO. Check old records. The bear market made this option unattractive. And who says that by going public you necessarily cede control? You yourself have given the example of BH. Nakumatt has a lot to gain (PR -wise)by being viewed as a truly local company and they try to play this up in the adverts. If I were the MD of Uchumi I would really belabour on the fact that we are 'local' and have the mwananchi as shareholders as opposed to some tightly family controlled outfits. This is all academic... Ultimately, they can decide what path they want to take... The point is that CHEAPER bank financing might have been key to their decision. A few years ago the bond market was being touted but then the banks started syndicating loans at lower rates as well as the EASE of getting money versus bonds... I think the overall 'cost' of the new financing might be cheaper than taking on Equity... Look at KenolKobil who has the heft to go out for short-term money! Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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mukiha		#17 Posted : Friday, June 11, 2010 10:15:27 AM
Rank: Elder Joined: 6/27/2008 Posts: 4,114		A clarification is necessary: Atul Shah has been the MD of Nakumatt for a very long time. He did not come in to replace Ramamurthy! Ramamurthy was "Operations Director" - reporting to Atul, the MD. Only thing was that Ramamurthy had become the PR face of Nakumatt. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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