Edgars unsure about Zim business prospects

Published: 19 September 2013

Clothing retailer Edgars Stores Zimbabwe is uncertain about the recovery prospects and future stability of the Zimbabwe's economy, despite the conclusion of elections and the swearing in of a new cabinet.

Edgars is shoring up its presence in the country by opening more new branches under the Edgars and Jet franchises.

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%.

Unit sales within the Edgars chain grew by 4.4%, while store trading profitability increased by 23.9%. Turnover for the period was $22.1m. Growth in the Jet chain's turnover amounted to 18.7%. The chain' sales made up 18.2% of group turnover (2012-17.4%). Store trading profit within the period is poorer this year at 4.7% against 10.8% last year. Profitability within the chain is expected to improve by year end as the newly opened stores begin to make a contribution and customers become more aware of the brand.

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. Westgate and Marondera branches were revamped, and an additional branch was opened in Chipinge at the end of July. 2 new stores were opened in June in Gokwe and Harare, bringing the total number of Jet stores to 18 (2012-14). Jet Chipinge was opened in July and there are plans to open more stores before Christmas trading season.

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.

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.

- BDlive

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