Naivas Supermarket has marked a historic milestone in Kenyan retail with the appointment of Andreas von Paleske as its Chief Executive Officer, making him the first non-family member to lead the company in its 35-year history. The leadership transition, which took effect on November 1, 2025, coincided with the release of impressive financial results showing revenue of Sh114.45 billion for fiscal year 2025, representing a 21.6 percent year-on-year increase from Sh94.07 billion in FY 2024.
Von Paleske, a German national who has served as Naivas’ Chief of Strategy for eight years, succeeds David Kimani, the son of founder Peter Mukuha Kago. This carefully orchestrated succession marks a defining moment for Kenya’s largest supermarket chain and signals a deliberate shift toward professional management structures designed to support the retailer’s ambitious growth trajectory.
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Strategic Rationale Behind the Leadership Transition
The decision to appoint a non-family CEO represents a strategic inflection point for Naivas, one that reflects broader governance trends among successful family businesses transitioning into professionally managed corporations. The Mukuha family and company board made this choice deliberately, recognizing that institutionalizing management structures would be essential for the company’s long-term sustainability and growth.
David Kimani, who has led Naivas since its early years, emphasized that the move was designed to insulate the business from potential family conflicts that have historically plagued other Kenyan family enterprises. By separating ownership from daily operations, Naivas aims to establish impartial, professional governance structures that prioritize corporate objectives over familial considerations. This separation creates clear boundaries between strategic oversight, which remains with the family through board representation, and operational execution, now entrusted to professional management.
The transition also addresses a critical need to strengthen transparency and accountability mechanisms that institutional investors increasingly demand. Since IBL Group led a consortium to acquire a 40 percent stake in Naivas in 2022, the company has operated under heightened scrutiny from sophisticated investors who expect world-class governance standards. These investors, including Proparco (a subsidiary of Agence Française de Développement) and DEG (a subsidiary of German KfW Group), bring not only capital but also expectations around corporate governance, financial reporting, and strategic planning.
The appointment comes against a backdrop of well-documented family disputes over succession and ownership that followed founder Peter Mukuha Kago’s death in 2010. These conflicts, while ultimately resolved, provided valuable lessons about the risks of maintaining pure family management in complex, rapidly scaling enterprises. The board’s decision to professionalize leadership reflects wisdom gained from these experiences and demonstrates commitment to preventing future governance challenges.
Andreas von Paleske: Experience and Qualifications
Andreas von Paleske brings extensive credentials to his new role as Chief Executive Officer. His journey with Naivas began approximately eight years ago when David Kimani personally recruited him as an advisor to chart the company’s long-term strategic direction. Von Paleske joined during a critical growth phase when Naivas was consolidating its market position and preparing for institutional investment.
Before joining Naivas, von Paleske accumulated over 25 years of experience across investment, operations, and strategy in the consumer and retail sectors. His career spans multiple continents and includes senior positions at prestigious private equity firms. He served as Global Head of Consumer at Actis, a prominent emerging markets investor, where he oversaw consumer sector investments across Africa, Asia, and Latin America.
Von Paleske also held a director position at Lion Capital, a London-based private equity firm specializing in consumer brands, where he oversaw investments in well-known brands including Wagamama and Kettle Foods UK. Additionally, he co-founded Africa Platform Capital, demonstrating his entrepreneurial capabilities and deep understanding of African markets. His career began at UBS Investment Bank, providing him with foundational expertise in financial markets and corporate finance.
Academically, von Paleske holds an MBA from Harvard Business School and a BSc in Economics from the London School of Economics, credentials that underscore his analytical capabilities and strategic thinking skills. This combination of educational background and practical experience positions him uniquely to lead Naivas through its next growth phase, which will require sophisticated financial management, strategic planning, and operational excellence.
During his tenure as Chief of Strategy, von Paleske demonstrated his value by playing instrumental roles in several critical initiatives. He guided Naivas’ expansion to over 100 branches nationwide, developed modernization programs across operations and technology, and facilitated external investment processes that brought in sophisticated institutional capital. His deep familiarity with Naivas’ culture, operations, and strategic challenges makes him an ideal candidate to lead the company forward.
Naivas’ Founding and Evolution
Understanding Naivas’ current position requires examining its remarkable journey from humble origins to retail dominance. The company was founded on July 27, 1990, by the late Peter Mukuha Kago, who started with a single small shop in Rongai, Nakuru County. Initially trading as “Rongai Self Service Stores Limited,” the business served local communities with basic grocery needs in a modest retail format.
The fledgling enterprise later rebranded to “Naivasha Self Service Stores” before finally adopting the Naivas Limited name in 2007. This evolution in naming reflected the company’s expanding geographic footprint and evolving brand identity. The founder’s vision extended beyond simple shopkeeping; he recognized opportunities to serve Kenya’s growing middle class with modern retail formats offering diverse product selections, competitive pricing, and improved shopping experiences.
Naivas expanded to Nairobi in 2001, opening a branch on Ronald Ngala Street in the city’s central business district. This strategic move marked the retailer’s entry into Kenya’s largest market and demonstrated ambitions beyond its Nakuru County origins. The expansion strategy emphasized accessibility, targeting both urban centers and emerging towns where modern retail infrastructure remained limited.
Following Peter Mukuha Kago’s death in 2010, management responsibility fell to his children, who faced the dual challenge of mourning their father while navigating complex business succession issues. The ensuing years saw protracted legal disputes among the founder’s children regarding ownership shares and management control. These conflicts, while painful for the family, ultimately strengthened the company’s governance structures by forcing difficult conversations about succession planning, ownership rights, and professional management.
Despite these internal challenges, Naivas continued expanding aggressively. The company benefited significantly from the collapse of competitors including Nakumatt and Tuskys, which created opportunities to acquire prime retail locations, hire experienced talent, and capture market share from faltering competitors. Naivas approached this expansion systematically, investing in supply chain infrastructure, technology systems, and human capital to support sustainable growth.
Financial Performance and Growth Trajectory
The financial results for fiscal year 2025 demonstrate Naivas’ continued momentum and operational effectiveness. Revenue reached Sh114.45 billion, reflecting 21.6 percent growth from the previous year’s Sh94.07 billion. This growth rate substantially exceeds Kenya’s overall economic growth, indicating that Naivas continues gaining market share and expanding its customer base.
The company, operating through its corporate vehicle Mambo Retail Ltd, reported profit for the year of Sh2.45 billion. While specific comparative figures for previous year’s profit weren’t disclosed in the announcement, the company characterized its profitability performance positively. Total assets increased to Sh60.02 billion, reflecting continued capital investment in new stores, technology infrastructure, inventory, and other growth-enabling resources.
Significantly, equity attributable to owners improved to Sh30.77 billion, reversing a prior year’s deficit. This improvement suggests successful capital restructuring, profitable operations, and potentially additional equity contributions from shareholders. The strengthened equity position provides Naivas with greater financial flexibility for future expansion and positions the company favorably in negotiations with suppliers, landlords, and financial institutions.
Non-controlling interest declined, indicating increased ownership consolidation. This trend likely reflects the IBL consortium’s acquisition of stakes previously held by earlier investors, consolidating ownership among fewer, larger stakeholders. Such ownership concentration can facilitate faster decision-making and more aligned strategic direction, though it also requires careful governance to protect minority shareholder interests.
These financial results position Naivas as Kenya’s dominant retailer by both revenue and footprint. The company’s performance compares favorably with major competitors including Dubai-based Carrefour, which reported Sh42.9 billion in Kenyan revenues for 2024, and Quickmart, which operates over 60 stores across 14 counties but remains smaller in overall scale.
Investment and Ownership Structure Evolution
Naivas’ ownership structure has evolved significantly over the past five years, reflecting the company’s transition from pure family ownership to a hybrid model involving professional institutional investors. Until 2020, the Mukuha family maintained 100 percent ownership through their investment vehicle, Gakiwawa Family Investments. This structure provided complete control but limited access to the substantial capital required for aggressive expansion in Kenya’s increasingly competitive retail landscape.
In April 2020, Amethis Fund II, alongside partners including DEG, MCB Equity Fund, and the International Finance Corporation (IFC), acquired approximately 30 percent stake in Naivas International (Mauritius), which owns 100 percent of Naivas Limited. This Sh6 billion investment provided growth capital while maintaining majority control with the Mukuha family. Amethis, a private equity firm specializing in African mid-market companies, brought operational expertise, governance improvements, and strategic guidance alongside financial resources.
The Amethis investment period proved remarkably successful but unusually brief. In June 2022, just over two years after entry, Amethis announced an agreement to sell its stake to IBL Group, the largest conglomerate in Mauritius. IBL led a consortium including Proparco and DEG that acquired a 40 percent stake in Naivas International. The transaction valued Naivas substantially higher than the 2020 investment, providing Amethis and its partners with attractive returns on their investment.
IBL’s entry marked a strategic shift toward longer-term institutional ownership. Unlike typical private equity investors who plan exits within 5-7 years, IBL operates as a strategic investor with permanent capital and operational capabilities in retail through its Winners supermarket chain in Mauritius. The consortium’s combined 40 percent stake, with the Mukuha family retaining approximately 60 percent, creates a balanced ownership structure that preserves family influence while providing institutional discipline and resources.
Currently, the ownership structure positions Naivas favorably for continued growth. The Mukuha family’s majority stake ensures alignment with founding values and long-term perspective, while institutional investors bring capital, expertise, and governance standards. This balance creates conditions for sustainable expansion while maintaining the entrepreneurial spirit that drove Naivas’ early success.
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Kenya’s Competitive Retail Landscape
Naivas operates in one of Africa’s most dynamic and competitive retail markets. Kenya’s retail sector has experienced dramatic consolidation over the past decade, with several once-dominant players collapsing under debt burdens and mismanagement. The failures of Nakumatt, Tuskys, Uchumi, and Choppies created both opportunities and cautionary tales for surviving retailers.
Carrefour Kenya, operated by Dubai-based Majid Al Futtaim, has emerged as Naivas’ primary competitor. The French retail giant entered Kenya in 2016 and has expanded to 28 outlets, primarily in urban centers including Nairobi, Mombasa, and Kisumu. Carrefour’s strategy emphasizes large-format hypermarkets offering extensive product selections including groceries, electronics, home goods, and apparel. The retailer reported Sh42.9 billion in 2024 revenues, positioning it as Kenya’s second-largest supermarket chain by sales.
Quickmart represents another significant competitor, particularly in Kenya’s secondary cities and highway towns. Founded by the late John Kinuthia in 2006, Quickmart has expanded to over 60 stores across 14 counties. The retailer received substantial private equity investment from Adenia Partners, which acquired majority ownership through its subsidiary Sokoni Retail Kenya. Quickmart’s strategy emphasizes fresh produce, dedicating 30-40 percent of floor space to fruits, vegetables, bakery, butchery, and deli offerings.
Other significant players include Chandarana Supermarket, a family-owned chain with over 25 branches serving primarily urban middle-class and affluent customers; Cleanshelf, focusing on convenience formats; and various regional operators serving specific geographic markets. The competitive landscape remains fluid, with new entrants periodically attempting to gain footholds while existing players jockey for prime locations and market share.
This intense competition has driven industry-wide improvements in customer service, store formats, product selection, and pricing strategies. Retailers invest heavily in technology infrastructure, supply chain optimization, and customer loyalty programs to differentiate themselves and retain customers. The sector’s competitive intensity benefits consumers through improved shopping experiences and competitive pricing but creates challenges for retailers managing thin profit margins and significant capital requirements.
Challenges Facing Kenya’s Retail Sector
Despite impressive growth, Kenya’s retail sector faces multiple structural challenges that impact all operators, including market leader Naivas. Economic headwinds including inflation, currency volatility, and reduced consumer purchasing power pressure sales volumes and profit margins. Rising costs for energy, labor, real estate, and logistics compress profitability, requiring continuous operational improvements to maintain acceptable returns.
The rapid advancement of e-commerce and digital retail channels disrupts traditional brick-and-mortar operations. While online grocery shopping remains relatively nascent in Kenya compared to developed markets, platforms including Jumia, Glovo, and retailer-owned delivery services are capturing growing share among urban consumers. Traditional retailers must invest in omnichannel capabilities, integrating physical stores with digital ordering and delivery systems to remain competitive.
Supply chain complexities pose ongoing challenges. Kenya’s infrastructure limitations, including unreliable electricity, poor road networks in some regions, and port congestion, increase logistics costs and complexity. Retailers must maintain extensive supply chain operations including warehousing, transportation fleets, and cold chain infrastructure for perishable products. Managing supplier relationships, particularly with small-scale farmers and manufacturers, requires sophisticated systems and substantial working capital.
Real estate dynamics create additional pressures. Industry analyses indicate an oversupply of retail space in certain markets, particularly Nairobi, estimated at approximately 1.7 million square feet. This oversupply gives landlords less pricing power but also indicates potential market saturation in some segments. Retailers must carefully evaluate expansion opportunities, balancing growth ambitions against market realities and profitability requirements.
Regulatory compliance requires ongoing attention and investment. Food safety regulations, tax compliance, labor laws, and environmental standards impose costs and operational complexity. Recent high-profile incidents, including temporary closures for expired products violations, demonstrate the regulatory risks facing retailers and the importance of robust quality control systems.
Competition from informal retail channels remains significant. Traditional markets, kiosks, and small shops continue serving substantial portions of Kenya’s population, particularly in rural areas and lower-income urban neighborhoods. These informal channels often operate with lower overhead costs and offer advantages including credit extension, personal relationships, and convenient locations. Modern retailers must differentiate through quality assurance, product variety, shopping experience, and value pricing to attract customers away from traditional channels.
Strategic Priorities Under New Leadership
Andreas von Paleske assumes leadership with clear strategic imperatives shaped by competitive realities, growth opportunities, and operational challenges. His priorities will likely emphasize several key areas designed to consolidate Naivas’ market leadership while preparing for future expansion.
Geographic expansion beyond Kenya represents a significant opportunity. With dominance established in the Kenyan market, regional expansion into Uganda, Tanzania, Rwanda, and other East African markets offers substantial growth potential. Von Paleske’s international experience and understanding of cross-border retail dynamics position him well to evaluate and execute regional expansion strategies. Such expansion would require careful market analysis, partnership development, regulatory navigation, and capital allocation.
Digital transformation and omnichannel retail development will require sustained investment and attention. While Naivas has established basic online ordering and delivery capabilities, substantial opportunities exist to enhance the digital customer experience, implement sophisticated data analytics, and integrate physical and digital channels seamlessly. Investments in technology infrastructure, e-commerce platforms, last-mile delivery networks, and customer relationship management systems will be essential for maintaining competitiveness as consumer behavior evolves.
Supply chain optimization offers opportunities for cost reduction and service improvement. Implementing advanced planning systems, optimizing distribution networks, strengthening supplier relationships, and improving inventory management can enhance operational efficiency while reducing costs. Von Paleske’s private equity background, with its emphasis on operational improvement, positions him well to drive these initiatives.
Operational excellence across the store network requires continuous attention. With over 100 locations, maintaining consistent service quality, merchandise availability, store appearance, and customer experience presents ongoing challenges. Standardizing processes, implementing performance monitoring systems, and investing in employee training and development will be essential for delivering consistent brand experiences.
Talent development and organizational culture will require careful stewardship during the leadership transition. While von Paleske’s eight-year tenure provides continuity, transitioning from family to professional leadership inevitably changes organizational dynamics. Building strong management teams, developing future leaders, and maintaining cultural elements that drove Naivas’ success while embracing necessary changes will be critical.
Financial management and stakeholder relations will demand sophisticated capabilities. Managing relationships with institutional investors, optimizing capital structure, allocating resources effectively across competing priorities, and maintaining financial discipline while pursuing growth will require careful balance. Von Paleske’s investment banking and private equity background provides relevant experience for these responsibilities.
Sustainability and social responsibility increasingly matter to consumers, investors, and regulators. Developing comprehensive environmental, social, and governance (ESG) strategies covering waste management, energy efficiency, sustainable sourcing, employee welfare, and community engagement will be important for maintaining stakeholder support and regulatory compliance.
Implications for Kenya’s Business Landscape
The Naivas leadership transition carries significance beyond the company itself, offering lessons and implications for Kenya’s broader business community. The successful transition from family to professional management demonstrates that Kenyan family businesses can professionalize effectively while maintaining founding values and family involvement. This example may encourage other family enterprises to consider similar governance evolution as they scale and seek institutional capital.
The transaction highlights Kenya’s attractiveness to sophisticated international investors despite economic challenges and regional competition. IBL’s substantial investment, along with participation by development finance institutions including Proparco, DEG, and IFC, signals confidence in Kenya’s retail market potential and Naivas’ growth prospects. Such investment brings not only capital but also expertise, networks, and credibility that benefit the broader economy.
The retail sector’s evolution demonstrates how local enterprises can compete effectively against international competition when they maintain focus on customer needs, operational excellence, and strategic discipline. Naivas’ success against Carrefour and other international entrants proves that local knowledge, cultural understanding, and operational agility can offset the brand recognition and deep pockets of multinational competitors.
Employment impact deserves recognition. With approximately 10,000 employees across its branch network, Naivas ranks among Kenya’s largest private sector employers. The company’s continued growth creates substantial direct employment while generating indirect jobs through supply chains, real estate, services, and related sectors. This employment contribution assumes particular importance given Kenya’s youth unemployment challenges and economic development priorities.
The appointment of von Paleske, a German national, to lead a major Kenyan enterprise reflects growing internationalization of Kenya’s business leadership. While some may question whether local talent could have filled this role, the appointment demonstrates that Kenyan businesses increasingly recruit talent globally based on qualifications and fit rather than nationality alone. This trend, balanced with development of local executive talent, can strengthen Kenyan businesses’ competitiveness.
Looking Ahead: Challenges and Opportunities
As Andreas von Paleske assumes leadership, Naivas faces both significant opportunities and substantial challenges. The company’s market leadership position, strong brand recognition, extensive store network, and healthy financial performance provide solid foundations for future growth. Institutional investor support, professional management structures, and family commitment to long-term success create favorable conditions for navigating challenges ahead.
However, competitive pressures will intensify as Carrefour expands aggressively and Quickmart pursues its own growth strategy. Maintaining market share while expanding profitably will require continuous innovation, operational excellence, and strategic discipline. The company must avoid the mistakes that felled previous retail giants, particularly excessive debt, overexpansion, and weak operational controls.
Consumer preferences continue evolving, with growing emphasis on convenience, quality, value, and shopping experience. Younger consumers, in particular, expect seamless integration of physical and digital shopping, personalized experiences, and social responsibility from brands they patronize. Meeting these evolving expectations while maintaining profitability requires ongoing investment and adaptation.
The macroeconomic environment remains uncertain, with inflation pressures, currency volatility, and potential policy changes creating risks for retailers dependent on consumer spending. Von Paleske’s leadership will be tested by ability to navigate these economic headwinds while executing growth strategies and maintaining stakeholder confidence.
Conclusion
The appointment of Andreas von Paleske as Naivas Supermarket’s first non-family CEO represents a watershed moment in Kenyan retail history. Combined with impressive FY2025 financial results showing revenue of Sh114.45 billion and 21.6 percent growth, the leadership transition demonstrates that Naivas continues executing successfully while evolving its governance structures for future growth.
Von Paleske brings extensive international experience, deep understanding of Naivas’ operations and culture developed over eight years as Chief of Strategy, and proven capabilities in investment, strategy, and operations. His appointment reflects careful succession planning by the Mukuha family and board, prioritizing long-term institutional success over family control of daily operations while maintaining family influence through majority ownership and board representation.
The leadership transition occurs within a broader context of retail sector evolution, marked by intense competition, technological disruption, and changing consumer preferences. Naivas’ continued success will depend on executing its growth strategy effectively, maintaining operational excellence, developing talent, and adapting to market changes while preserving cultural elements that drove early success.
For Kenya’s business community, the Naivas example demonstrates that family businesses can professionalize successfully, attract institutional investment, and compete effectively against international competitors while remaining true to founding values. As von Paleske leads Naivas into its next chapter, the company’s performance will offer valuable lessons about leadership transitions, professional management, and sustainable growth in emerging markets.
The challenges ahead are substantial, but Naivas enters this new era from a position of strength. With Kenya’s largest retail footprint, strong brand recognition, solid financial performance, institutional investor support, and experienced leadership, the company is well-positioned to maintain market leadership while pursuing ambitious growth objectives. The success of this leadership transition will ultimately be measured not just by financial metrics but by Naivas’ ability to serve Kenya’s consumers effectively, create employment opportunities, support suppliers and communities, and demonstrate that local enterprises can achieve world-class excellence.
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By: Montel Kamau
Serrari Financial Analyst
11th November, 2025
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