Harare — Zimbabwean clothing retailer Edgars Stores Limited reported a 22.4% drop in group sales volume for the 26 weeks ending July 7, 2024, as economic challenges and pressures on disposable incomes weighed on consumer spending. During the period, Edgars sold 850,000 units, reflecting a shift as many consumers prioritized essential goods over clothing.
Group chairman Thembinkosi Sibanda said in the financial report that the company’s revenue declined by 15.4% to US$16.1 million from US$19 million in the same period last year. Despite these challenges, Edgars implemented margin improvement strategies through better procurement and increased internal manufacturing output at its Carousel facility, boosting product quality and stock freshness amid a difficult supply chain environment.
Having migrated its listing from the Zimbabwe Stock Exchange (ZSE) to the Victoria Falls Stock Exchange (VFEX) on April 5, 2024, Edgars saw a notable improvement in profitability. Group profit before tax rose by 169.6% to US$160,000, compared to a US$230,000 loss in the previous period. Sibanda noted that Edgars typically generates most of its profits during the festive season, with expectations for a stronger second half.
Retail Chain Performance
The Edgars chain recorded a turnover of US$8.3 million, a 5.3% decline from the previous year, with units sold down 15.37% to 440,000. The Jet chain saw a larger drop, with total sales falling 17% to US$6.2 million and units sold decreasing by 18.69% to 580,000. ZiG credit sales contributed significantly to both chains, making up 93.1% of ZiG sales and 73% of total USD credit sales.
In the financial services sector, Edgars’ US dollar retail debtors’ book grew by 25.3% to US$10.4 million, reflecting an increase in dollar-denominated accounts from 77,000 to 82,000. The ZiG debtors’ book saw a notable increase of 1154.3% to ZIG$7.5 million, a result of high ZiG interest rates that have limited local currency borrowing.
Manufacturing and Expansion Initiatives
The company’s manufacturing arm, Carousel, expanded its output significantly, with units produced rising by 95% to 132,600, while manufacturing turnover grew from US$852,000 to US$1.49 million. Production efficiency was bolstered by a US$1 million investment in semi-automated machinery, including pocket machines, embroidery tools, and upgraded boiler systems.
To grow its retail footprint, Edgars opened a new store at Bulawayo’s Ascot Shopping Centre in March 2024 and a Jet store in Harare’s Hogerty Hill Mall. Additionally, three cash-only “Express Stores” were launched to cater to low-income customers, with plans for five more locations by the year’s end.
Edgars remains focused on merchandise procurement and inventory planning to improve profitability while sustaining product quality.