Edgars pins sales hopes on festive season
Harare (New Ziana) – Clothing retailer, Edgars Stores said on Wednesday it is pinning hopes of boosting sales on the festive season and continued economic stability.
In its update for the third quarter ended October 4, the group saw total clothing units sold slump to 585 000 from 820 000 during the same period last year, resulting in a 36 percent decline in inflation-adjusted turnover.
“Historically, the last quarter significantly outperforms the rest first three and accordingly we look forward to a strong performance,” chief executive, Tjeludo Ndlovu said.
“Key to achieving this will be good diaspora remittances and reduced new Covid-19 cases which will allow free movement of people.”
Overall units sold for the year to date slumped to 1.5 million from 2.5 million last year.
The decline was also partly due to closure of businesses due to the Covid-19 induced national lockdown but the situation improved in the past quarter after easing of restrictions, the group said.
Earnings before interest, tax, depreciation and amortisation were down 20 percent compared to the same period last year.
A rise in operating costs such as utilities, rentals and salaries also hit on earnings.
In terms of divisional performance, the Edgars and Jet chains saw unit sales slump 50 percent and 43 percent respectively while manufacturing arm, carousel was the only one to record a positive performance, with sales up 142.7 percent for the period.
To try and boost sales, Edgars Stores reviewed credits limits “for customers with a good credit record upwards” resulting in its debtors book nearly doubling from the previous quarter to $123 million.
“Civil servants continued to be a key customer segment constituting 34 percent of active accounts,” Ndlovu said.
Active accounts were down to 32.9 percent from 40.7 percent of total accounts.
The group’s microfinance unit, Club Plus saw its loan book decline 70 percent to $13.1 million in inflation adjusted terms.
“The demand for loans is high, but the unit is constrained by funding challenges,” Ndlovu said.
“The company has diversified its product offering to reduce concentration risk of school fee loans.”