Ngimanene na Muchere
Elder Lister
As I get ready to masticate this Ngimanene na matharo, I want to take a moment to share my thoughts on Quickmart Supermarket who btw their latest branch will be former Tuskys OTC. As you recall, the controlling shares of then Tumaini and Quickmart were bought out by a SPV Sokoni Retail from a PE firm and merged to QM and later went on a steroid fueled expansion drive. Now with this kind of expansion means only one thing, they are most likely debt funded and are propping up their valuation for a sale to either a mega supermarket like Walmart, recall they were once interested in buying Tuskys or sell to a larger PE firm, probably managing pension funds. They are creating the highest valuation they possibly can through:
1 Number of outletets
2 Supplier goodwill
3 Metrics (footfall, location remember they took over the mtaani supermarkets and made them larger more hip)
4 Goodwill etc etc
5 Get their procedure book to the T
They most likely have identified a potential buyer and maybe already in talks with them hence an acceleration in expansion because if you know how PE works, they have about a 7 year window to create as high a valuation as they can, triple, quadruple their investment in that period, sell and ship out. So QM as is isn`t turning a profit.
You recall the Twitter handle that created a buzz @beiyaukweli who went around supermarkets to highlight price differences? It became evident that QM was among the most expensive supermarkets around and my guess is they were contacted by QM na kuonwa kando as it had created quite a buzz online hence why it`s no longer active after such a short time, NB they hinted something akin to that.
So the big Q is this, with such debt fueled hypergrowth, what happens if the proposed sale doesn`t go through, the lenders want their money returned and the tide is pulled back? Who will be found swimming naked?
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from foreign investor at hand
