Edgars unsure about Zimbabwe business prospects
HARARE — The Zimbabwe associate unit of clothing retailer Edgars Stores is uncertain about the recovery prospects and future stability of the country’s economy, despite the conclusion of elections and the swearing in of a new cabinet.
Edgars Stores Zimbabwe is shoring up its presence in the country by opening more new branches under the Edgars and Jet franchises. It competes in the Zimbabwean market against established clothing and apparel retailers such as Topics and other stores also offering clothing on credit. In the 26 weeks to July 6, Edgars Zimbabwe posted turnover of $22.1m while “store trading profitability increased 23.9%”. Unit sales grew 4.4%, and store trading profitability rose 23.9%.
Edgars Stores Zimbabwe chairman Themba Sibanda said on Wednesday that during the six months to June this year, the company traded out of 24 outlets — one more than in the same period a year earlier.
However, there are still doubts among business executives and investors over the restoration of certainty to the operating environment in Zimbabwe.
Mr Sibanda said it was too “early to determine with certainty the direction in which the economy will move”. Nonetheless, Edgars Zimbabwe would “intensify efforts to improve product offerings and value within both retail chains while implementing tighter cost control” across the business.
The group’s manufacturing unit had significantly recovered during the review period, with profits before interest and tax amounting to $118,901 compared with the previous contrasting period’s $141,664 loss.
Trade receivables were $18.8m, a significant 14.7% increase on the same period last year.
The number of credit accounts were 188,447 of which 72.5% were active, an improvement from the previous year’s 74%. Average handovers for the period amounted to 1.2% and 0.3% of lagged credit sales and lagged debtors respectively.
Edgars Zimbabwe had provisioned 2% of its total debtors book for “doubtful debts”.
Mr Sibanda said most of the group’s capital expenditure had been on new stores and refurbishments as well as improvements on the company’s factory, equipment and information technology systems.