eBusiness Weekly
Michael Tome
EDGARS Stores Limited, says its unit sales receded 2,4 percent year on year to October on the back of currency instability experienced in the second quarter of 2023.
Figures show that the group’s year-on-year unit sales waned by 37 000 units as sales went down to 1 744 654 (units) against 1 781 073 realised over the same period in 2022. According to the retail giant, the currency turbulence witnessed in the period saw incomes lose as significant chunk of buying power mostly from civil servants who constitute circa 35 percent of their customer base dropped.
Zimbabwe dollar suffered bouts of depreciation mostly in the second quarter of 2023 as the parallel market exchange rate plummeted significantly.
The local currency fell victim to inflation between May and June as the parallel market exchange rate randomly plummeted to $8 500 against US$1, while the weighted average foreign exchange rate reached its weakest of $6 926 to the greenback on auction as at June 20, 2023.
At the time, year-on-year blended inflation spiraled to a high of 175, 8 percent in June while month-on-month stood at 74,5 percent. Edgars’ Stores Limited is, however, optimistic that the operating environment will remain stable for the remaining part of the year, creating opportunities for the business to grow further.
“Cumulatively for the nine months to 08 October, the unit sales were 2, 4 percent below last year due to the currency instability experienced in the second quarter, which saw customers losing a significant part of their buying power,” said Edgars Group, chief executive officer Sevious Mushosho in the trading update for the nine months to October 2023.
According to Edgars, liquidity constraints continued to be a challenge in the period under review as most banks struggled to fulfill drawdown requests.
However, the situation improved soon after the national poll in August 2023, and the clothing firm expects the stability to continue until the end of 2023 fourth quarter.
Operationally, the group performed outstandingly in the third quarter as unit sales surged 28,5 percent to 649 788 from 505,531 realised in the same period last year.
Edgars Chain unit sales registered a 39,7 percent growth in the third quarter, to 260,043 while revenue for the nine months surged 43,99 percent in historical terms ahead of last year.
Credit sales constituted 63 percent of total sales compared to 54 percent realised in the same period last year.
The group’s other segment, Jet Chain managed an 18 percent growth in unit sales to 334 910 from the prior year’s 283 877 units, while credit sales made up 60 percent of the total sales for the quarter compared to 49 percent in the same period last year.
The segment’s revenue closed the nine months 48 percent ahead of the prior year in historical terms.
Carousel (The manufacturing business) attained a 54,6 percent growth in sales units to 54 835 year on year during the quarter under review.
Mushosho indicated that Carousel had plans to acquire more machines including a laser Cutter to improve efficiencies, increase production capacity, and reduce the cost of production.
Given the looming demand from the chain stores, the factory had enough stocks of raw materials to meet the increased demand. According to the group’s CEO orders for more fabric were placed to cover 12 months of production for all the product ranges.
In the said period, Edgars Financial services income also declined 32,8 percent to $12,4 billion compared to $18,5 billion recorded in 2022.
The Zimbabwe dollar book shrunk to $2,7 billion from a December 2022 balance of $2,85 billion while the US dollar book grew 50 percent on the December 2022 balance to close at US$9,5 million.
