Turkish Fashion Giant LC Waikiki Battles Survival Crisis as Kenyan Operations Bleed Millions

Mombasa store closure signals deeper troubles for once-ambitious retail expansion

The gleaming shop floors of LC Waikiki’s Likoni Mall outlet in Mombasa tell a story of retail ambition gone awry. What was meant to be a strategic beachhead for the Turkish fashion giant’s Kenyan expansion has instead become a financial albatross, hemorrhaging money as shoppers stay away and sales plummet to unsustainable levels.

Behind the carefully arranged clothing racks and promotional displays lies a brutal commercial reality: LC Waikiki Retail Kenya Limited is fighting for survival, locked in a bitter legal battle with its landlord while desperately trying to stem mounting losses that have pushed the once-confident retailer to the brink.

Court documents filed last week lay bare the extent of the crisis. Moses Chege, the company’s finance and accounting manager, painted a grim picture of persistent underperformance that has defied every attempt at revival. Despite promotional campaigns, product realignments, and various marketing initiatives, the Likoni Mall store has operated at a loss month after month, year after year.

The numbers tell their own devastating story. LC Waikiki now faces claims totaling a staggering 45.8 million shillings from Nova Holdings Limited, the property company controlled by businessman Ashok Doshi. The claim breaks down to 40.4 million shillings in unpaid rent and VAT, plus another 5.4 million shillings in service charges. For a single retail outlet, these are catastrophic figures that raise serious questions about the viability of the entire Kenyan operation.

What makes the situation particularly explosive is the timeline. LC Waikiki signed a 15-year sublease agreement in January 2022, committing to occupy prime retail space on the first floor of Likoni Mall until 2037. The deal came with strings attached: the retailer could not walk away until December 2027, a full 66 months into the tenancy. Yet by July this year, barely three years after opening, LC Waikiki had seen enough. The company issued a three-month termination notice, planning to exit by September 30, a full 29 months ahead of the earliest permissible date.

Nova Holdings was having none of it. The landlord rushed to court seeking a permanent injunction to stop what it characterized as a premature and unlawful termination. Justice Wendy Micheni granted temporary orders restraining LC Waikiki from vacating the premises, but the legal maneuver has only prolonged the agony for both parties.

The court filings reveal a relationship that deteriorated from cooperation to confrontation. Initially, Nova Holdings tried to help. Following negotiations, the landlord agreed to a 10 percent rent discount for six months covering July to December 2024. LC Waikiki also sought free marketing space to boost visibility during peak seasons, hoping to drive the foot traffic that had proved so elusive.

Nothing worked. Sales continued their downward spiral through 2024 and into 2025, defying the holiday season bump that retailers typically count on. By May this year, LC Waikiki executives were desperate enough to meet with Doshi at his residence, pleading for restructuring options or an amicable exit strategy. No resolution emerged from that meeting, setting the stage for the current courtroom confrontation.

Nova Holdings now accuses LC Waikiki of actively dismantling its operations, carting away goods and merchandise in preparation for an unauthorized exit. The landlord’s lawyers warn that if the retailer succeeds in removing all its inventory, there will be nothing left to auction should the court rule in Nova Holdings’ favor. It is the kind of messy commercial divorce that leaves both parties bloodied.

For LC Waikiki, the Likoni Mall debacle represents more than just one failed store. The Turkish retailer arrived in Kenya with considerable fanfare, part of a broader East African expansion strategy. The company opened outlets at Nairobi’s Junction Mall in 2019 and The Mall Westlands (TRM) in 2018, positioning itself as an affordable fashion alternative in Kenya’s competitive retail landscape.

But the Mombasa store has become a cautionary tale about the perils of overexpansion and misjudging local market dynamics. Likoni Mall, despite its modern facilities, has struggled to attract the consistent foot traffic that retail tenants need to survive. The location, while ambitious, may have been too far removed from established shopping patterns in Mombasa, leaving LC Waikiki and other tenants fighting for scraps of consumer attention.

The crisis also exposes the precarious economics of modern retail in Kenya, where rising operational costs, changing consumer habits, and economic headwinds have claimed numerous victims. LC Waikiki’s assertion that it cannot be compelled to continue a commercially untenable tenancy strikes at the heart of a fundamental question: what happens when long-term lease commitments collide with short-term commercial survival?

The retailer argues that having exercised its contractual right based on financial hardship, it should not be forced to continue hemorrhaging cash simply because the landlord has failed to find a replacement tenant. Nova Holdings counters that a deal is a deal, and that LC Waikiki knew exactly what it was signing up for when it committed to a 15-year lease with a five-and-a-half-year lock-in period.

As the legal battle plays out, with the next court date set for November 5, the broader implications for Kenya’s retail sector are unmistakable. International brands entering the market must contend with unpredictable consumer behavior, challenging locations, and lease agreements that can become financial traps when things go wrong.

For LC Waikiki, the question now is whether the Mombasa troubles are an isolated failure or a harbinger of deeper problems across its Kenyan operations. The company has remained largely silent about the performance of its other outlets, but the Likoni Mall disaster has undoubtedly damaged its reputation and raised doubts about its long-term commitment to the Kenyan market.

What began as an ambitious expansion has devolved into a fight over who will bear the cost of a failed retail experiment. Whether LC Waikiki ultimately escapes its lease obligations or is forced to continue paying rent for an empty, unprofitable store, the damage to all parties involved is already severe and irreversible.

The once-promising Turkish fashion chain now finds itself trapped in a Kenyan courtroom, its regional ambitions in tatters, its balance sheet bleeding, and its future in the market hanging by a thread.