Restaurant chain Java House is struggling to find buyers amid reports of low profitability that have made it difficult for its owners to get the price they were looking for.
The business was put on sale by UK-based equity fund Actis for an undisclosed value and talks with potential suitors have dragged on for four months.
Actis has been seeking to offload its 100 percent stake in the restaurant operator, with the business initially valued at between Sh2.5 billion and Sh3 billion.
“The sale of Java to potential buyers stopped as sales and profit are down. If they sell it now, they will not get the price they have been looking for,” a source familiar with the details told the Business Daily on Wednesday.
“If you change strategy, sales drop off, profits drop off and value also drops off.”
Sarah Douglas, a communications director at Actis in London, declined to comment on the matter. She had previously declined to offer us any comment on the same, terming the ongoing developments at Java as market speculation.
Java House CEO Priscilla Gathungu also did not respond to our queries by the time we were going to press.
Ms Gathungu is its first Kenyan chief executive who last November replaced Derrick Van Houten who took over in March 2021.
The Business Daily could not establish why the sales numbers at Java had dropped to the extent the restaurant chain’s value in the market has declined.
But the drop in sales among Kenyan restaurants is not unusual bearing in mind the cutthroat competition for customers.
Java is the biggest restaurant chain in the region with 72 outlets, tying with Chicken Inn (72), Artcaffe (35), KFC (33), and Burger King (5) among others.
Read: Java House appoints first Kenyan CEO
Other players targeting the same clientele include Subway and Big Square.
Plans to sell Java come at a time the eatery is experiencing intense competition from other players.
