Choppies exits Kenya after four years: all 12 stores distressed, CEO suspended

Choppies, a Botswana retailer with more than 130 stores at home, entered Kenya in 2015 by acquiring 75% of Ukwala Supermarket for Ksh1 billion (about $10 million), and announced plans to treble its 12 Kenyan stores over three years. Instead it met Carrefour, Shoprite and Game Stores entering Kenya with far deeper pockets, followed by a merger of rivals Quick Mart and Tumaini — and by September 2019 all 12 of its Kenyan stores were classified as distressed.

At an extraordinary general meeting on 11 September 2019, Choppies announced it would exit Kenya and had listed its Kenyan assets for sale, with more than 200 layoffs in the works. The picture beyond Kenya was little better: Tanzania and Mozambique were distressed, South Africa's North West business was marked for disposal, while only Botswana and Zambia performed steadily. Director Wilfred Mpai gave shareholders the ledger country by country.

The company was also in governance crisis: CEO Ramachandran Ottapathu was suspended in May 2019 after a forensic audit alleged malpractices including sales of ghost stock to inflate revenue — he blamed a boardroom fallout over his push for transparency — and shares had been suspended on both stock exchanges since 1 November 2018 because auditors PwC could not finalise the 2018 financials due to irregularities. Chairman Festus Mogae, Botswana's former president, said he would step down.

12 Kenyan stores all classified distressed; the $10 million Ukwala acquisition written toward exit; shares suspended on two bourses since November 2018; 200+ layoffs.

Choppies entered Kenya at exactly the moment global chains chose the same market, and had no answer to their pricing and supply-chain muscle.

The expansion plan (trebling store count) was sized for growth, not survival — when sales stagnated, all 12 stores tipped into distress together.

Financial-reporting irregularities froze the company's shares for a year mid-fight, cutting off the capital a losing market battle demands.

Entering a market against deeper-pocketed multinationals needs a capital plan for the years of losses — and governance that can survive the forensic audit when losses arrive.

Choppies listed its Kenyan assets for sale, began consultation on 200+ redundancies with the Kenya Union of Commercial Food and Allied Workers, and braced for the forensic-audit and boardroom review at the September 2019 EGM. The material records no completed sale.