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Last Updated: Friday, 2 June 2006, 10:45 GMT 11:45 UK
Kenyan shop chain shuts its doors
Jacaranda trees in bloom
Several of the closing stores are in the capital, Nairobi
One of Africa's largest retailers has closed its doors after 30 years of trade after facing insolvency.

Kenya's oldest supermarket chain Uchumi said it could no longer sustain its losses, blaming mismanagement, political interference and competition.

The move, which has seen 1,200 people laid off, comes despite attempts to restructure the firm and the appointment of a new management team.

Bosses said they were looking to find a financial solution to save the chain.

'Prudent action'

The BBC's Josphat Mokori in Nairobi said that Kenyans were surprised at the closure, given it had been attempting a turnaround.

"It has come as a shock to many who used to shop there," our reporter said.

The firm said it had shut the 17 outlets it owned - although ten which under a local franchise, including one in the Ugandan capital Kampala, were continuing to trade.

The new management had tried to cut costs, get rid of non-strategic assets and raise additional capital, chief executive John Masterten-Smith explained.

"Business has been encumbered by various hurdles in day-to-day dealing with our trade and non-trade creditors," he said.

"The board is of the view that the business is facing insolvency and it is prudent that necessary action is taken to stem further losses."

Uchumi was hit earlier this year when local company Sameer Group pulled its 10% stake in the firm, weakening the supermarket.

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