Builders to Exit Kenya After Two Years of Struggle

South African retailer Builders Warehouse is set to exit the Kenyan building and construction market due to persistent financial losses and poor performance.

Builders Warehouse, a subsidiary of South Africa’s retail giant Massmart, has initiated the process required for the closure of its sole local outlet at the Waterfront Karen in Nairobi barely two years after opening shop.

The retailer attributed the planned exit from the country to persistent losses and poor performance due to factors such as the inability to import stock timeously and tough importation rules that have undermined its competitiveness.

“As a result, the business has had to consider closing Builders Warehouse Karen Waterfront in Nairobi, Kenya. We have initiated the process required for potential closure,” the company said in a notice dated Feb. 1, 2023.

Builders sort to “capture contractors in the large-scale construction industry as well and individuals keen on Do It Yourself, a growing trend among Kenyan middle class,” Massmart said while announcing the store’s opening in Aug. 2020.

Its inventory would cover building materials and home improvement requirements for floors, paints, sanitaryware, kitchens, lighting, electrical, and appliances.

This was viewed as an attempt to bring formal retail experience to the local building and construction sector, which is dominated by small hardware shops and manufacturers selling directly to large clients.

The plan now appears to have hit the wall, pushing Builders Warehouse into a swelling pool of South African firms that have exited Kenya in recent times.

These include Massmart which exited Kenya last December, just a few months after Shoprite closed shop barely two years after launching local operations.

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Earlier, South African proprietors of Nairobi’s Fairview Hotel, Town Lodge, and City Lodge Two Rivers also exited the local market over mounting debts.

City Lodge sold its three hotels in Kenya and one in Tanzania to Actis for Sh1 billion. The four hotels were making Sh2 billion in losses as of Dec. 31, 2020.

In 2017, South Africa’s Tiger Brands exited Kenya after selling its 51% stake in Haco Tiger Brands to Chris Kirubi who held the remaining 49% stake.

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