JOHANNESBURG – Zimbabweans have become fashionistas, frequently changing their wardrobes and opening accounts with trendy apparel outlets such as Topics, Truworths and Edgars, but the retailers are bleeding as they are hesitant to raise prices.
Other credit outlets such as TV Sales & Home have also been doing well, raking in the profits and Edgars Zimbabwe says there is resurgent consumer spending.
Analysts say Zimbabweans are running for cover, clearing their bank balances of bond notes in anticipation of continued value loss as they are unable to get their money out of banks. “We anticipate cash sales at both Edgars and Jet will continue to rise as customers extinguish their RTGS (electronic bank balances) in anticipation of an inflationary environment,” analysts at IH Securities said in an update note on the company.
Executives from Edgars and Truworths have confirmed that account numbers and sales volumes are going up. Edgars Zimbabwe said last month that despite cash and foreign currency shortages, there was “resurgent consumer spending”, which had helped it to a 7percent revenue surge to $24.7million (R338.63m) for the half year period to July 9.
Truworths – which runs Topics, Truworths Man and Truworths Ladies as well as Number 1 stores – the number of accounts increased by 4.1percent to 88982 in the year to July 9.
Chief executive, Bekhithemba Ndebele, said although merchandise sales volumes for the year to July 9 had fallen by 28.8percent, the company was sitting pretty, with no US dollar obligations on its books. This is despite the fact it is mainly an import business as it has to import most of its apparel either in fabrics for local manufacturing or in complete apparel units.
Merchandise sales for the period amounted to $12.2m. This translated to a comprehensive loss position for the full year period of $1.7m. There has also been a marginal increase in the number of account holders who are able to make purchases from 65.7percent in 2016 to 66.9percent this year. “For all the imports that have come in we have raised the cash up-front and there are no US dollars obligations on the book.
“For the month of September we broke even after 3 weeks of sales and on apparel we haven’t increased prices,” Ndebele said. For Truworths Zimbabwe, price increases have been on perfumes “because they come in on a monthly basis”.