(Nairobi) – Naivas, one of Kenya’s largest retail chains, reported a KSh 1.9 billion profit after tax for the financial year ending in June 2024, marking a 19.6% decline from KSh 2.3 billion in 2023. The dip in profit reflects challenges the retailer faced despite an increase in sales.
Naivas saw its sales rise by 3.6% to reach KSh 91.9 billion, up from KSh 88.7 billion in 2023, continuing a steady growth trend that the retailer has maintained since 2020. However, the retailer’s total assets experienced a slight reduction, falling by 0.3% to KSh 31.3 billion compared to KSh 31.4 billion in the previous year. Liabilities also dropped modestly, decreasing by 1.25% to KSh 24.4 billion.
According to the latest annual report by IBL Group, the Mauritian conglomerate that holds a majority stake in Naivas, the retailer’s expenses rose by 4.2%, reaching KSh 90.2 billion. This increase in expenses has contributed to the decline in overall profits. IBL Group’s CEO, Arnaud Lagesse, noted that Naivas has shown resilience and continued growth despite challenges like currency depreciation, political instability, and intensified competition in the retail sector.
IBL Group, which has broadened its reach beyond Mauritius, reported that for the first time, over 50% of its sales came from operations outside the island. Naivas and Harley’s were added to the group’s Commercial & Distribution cluster in East Africa, which now contributes 35% of IBL Group’s total revenue, a significant rise from zero revenue in 2023 due to the recent consolidations. Meanwhile, 44% of IBL’s revenue is generated in the Indian Ocean region, driven by solid organic growth across established businesses.
Naivas has aggressively expanded its network, now operating 106 outlets across Kenya. This rapid growth has placed Naivas among Kenya’s largest retailers, strategically positioning stores in prime locations across the country. The expansion has occurred as other prominent supermarket chains in Kenya, such as Uchumi, Tuskys, and Nakumatt, have struggled with bankruptcy and operational issues, forcing them to close many of their stores. Naivas now faces competition from Quickmart and Carrefour, which are also expanding their market presence both online and offline.
In 2023, IBL Group increased its stake in Naivas through its subsidiary, Mambo Retail. In August, Mambo Retail acquired an additional 40% of Naivas, following an earlier purchase of an 11% stake in July. This gave IBL Group, through Mambo, majority control with a 51% shareholding in Naivas. Currently, IBL Group holds a 73.2% stake in Mambo Retail.