Pakistan’s leading footwear manufacturer and exporter, Servis Group will cede its Kenyan shops to Kwanza Shops beginning next week. It is not yet clear why the leading footwear brand and retailer is closing shop barely two years after its venture into the Kenyan market, but speculations are pointing at stiff competition from the household name, Bata. However, speaking to Business Daily, Servis’ Africa’s chief operating officer, Mr Salman Basharat said that the company had decided to change the business model, hence the secession to Kwanza.
Servis, which had planned to open a manufacturing plant in 2013 in a bid to increase its footprint in the market, reported a sales increase of 18% in its 2011 financial results. This increase was attributed mainly to a growth in exports, which reported a 66% increase over the same year. However, its unaudited first quarter results for 2012 report a gross profit ratio decline to 15% from 17%. The company’s sales have also declined by 21%.
The shoe retailer, whose shoe philosophy is perfect fit, top quality of materials and durability had invested in capturing Bata’s customer base, and had even placed its shops strategically next to most Bata shops. In Moi Avenue and Kenyatta Avenue for example, it was hard for shoe shoppers to differentiate between Bata and Servis shops since the branding was similar. Servis’ exit comes at a time when Bata Shoe Company is rolling out an expansion drive to increase presence not just in Kenya but in the regional market. Last year, Bata sold over 10 million pairs of shoes in Kenya and hopes to increase this to 30 million.
Commenting on the takeover the director of Nairobi Business Ventures Limited, the owners of the Kwanza brand, Raj Srungarapu, told Business Daily that Kwanza has bought the remaining stock from Servis and will continue selling it until they introduce their own products into the market.
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