Edgars revenue suffers from lockdown closures

Harare, (New Ziana)- Clothing retailer, Edgars said on Wednesday it recorded a 17 percent drop in turnover in inflation adjusted terms in the first quarter of 2021 compared to the same period last year as its stores were closed owing to the Covid-19 induced lockdown.

Group chief executive Tjeludo Ndlovu said the stores were closed for seven out of the 13 weeks of the quarter, with “very little business” conducted online.

Units sold were down to 417 639 from 542 082 during the same period last year.

“Normal trading resumed on 3 March 2021, bringing relief to our turnover and more importantly to our cashflows,” Ndlovu said.

She bemoaned low levels of disposable incomes in the country, which left little for other discretionary spending for items such as clothing.

“The percentage of disposable incomes spent by Zimbabweans on food is as high as 79 percent of total income, which crowds out discretionary spending on other needs such as clothing,” she said.

In the three months, the Edgars and Jet chain stores respectively saw sales declining 36.1 percent and 42.2 percent compared to the same period in 2020.

The group’s manufacturing unit, Carousel however saw a 298.6 percent jump in sales.

“The factory remained open over the lockdown as it was classified as an essential service,” Ndlovu said.

Active accounts declined to 37.6 percent from 41 percent.

She said most of the company’s credit customers managed to pay their instalments on time even during the lockdown.

Inflation adjusted earnings before interest, taxation, depreciation and amortisation were down 17 percent compared to last year while borrowings stood at $364 million, up from $245 million in December 2020.

Meanwhile, the group’s microfinance unit, Club Plus saw its loan book grow 51 percent to $47.2 million.

In the outlook, Edgars is banking on the good agricultural season to boost the economy’s performance and resultantly improve disposable incomes.

“We are also perfecting our preparedness for future lockdowns,” Ndlovu said.
New Ziana