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CLOTHING retail chain, Edgars Stores Limited, says despite global shocks in supply chains, it has registered significant volume growth across all business units and plans to open new outlets and intensify efforts to engage new raw material suppliers to mitigate the effects of yarn shortages in the global market.
The group’s business units are Edgars, Jet stores, Carousel manufacturing and a financial service firm.
The geopolitical developments in Eastern Europe where Russia is conducting a special military operation in Ukraine, have triggered price increases across the world, including in Zimbabwe, as supply chains have been significantly affected.
Jet stores
With the conflict dragging, logistical delays are likely to continue to disrupt the flow of materials into the sub-region while other goods may fail to arrive.
Several local businesses have already highlighted the knock-on effect of the conflict to their operations.
However, in its first-quarter trading update, the listed clothing retail outlet said notwithstanding the challenges in the operating environment and the uncertainty brought about by the Russia-Ukraine conflict, it managed to achieve volume growth across all significant business units.
“Total group units sold increased by 62 percent from 363 162 to 588 534 compared to the same period last year,” said the company.
“This significant growth can be attributed to two factors — the Covid-19 lockdown during Q1 of 2021 and management’s efforts in ensuring that fresher and more competitively priced merchandise is available in-store.”
Edgars said volumes in the retail chain were up 81 percent with 239 055 units sold compared to 132 126 units in the comparative period.
“The split between credit and cash sales was 58 percent (2021: 65 percent) and 42 percent (2021:35 percent) respectively,” it said.
“Net trading area increased from 20,814m to 21,145 square metres following the move of the Borrowdale store to a larger trading space.
“This move has resulted in a wider merchandise assortment for this market with the store showing strong performance in the quarter under review. Stock covers closed at 19,7 weeks (2021:20,3 weeks).”
According to the trading update, total unit sales for the Jet chain were up 104 percent to 384 672 compared to 188 279 last year.
“The chain opened one new store in the quarter, in Harare CBD, taking the store count to 32 (2021: 28). Comparable unit sales growth was 86 percent. Stock covers closed at 17,2 weeks (2021:14,6 weeks),” said the company.
However, the group registered a slight drop in active accounts decreasing from 128 200 to 127 300 in the period under review.
Harare CBD
A total of 3 052 new accounts were opened compared to 883 in the first quarter of last year.
Debtors’ collections were above expectations, due to improved customer education about available multiple payment platforms, it added.
Edgars said expected credit losses (ECLs) remain below the industry five percent benchmark of 3,1 percent compared to 3,0 percent last year.
“Despite the challenging inflationary environment, the business will continue to write good credit to new and existing customers. Management is pursuing funding options to ensure this continuity,” said the company.
On its Carousel manufacturing unit, it said management has embarked on various retooling and training initiatives, which will result in widening of product offering, improvement in quality, productivity enhancement and an improvement in efficiencies.
“The improved efficiencies will go a long way in ensuring profitability of the business. Efforts have also been made to procure critical raw materials to secure production in the third quarter and beyond.
“Management continues to engage new raw material suppliers to mitigate the effects of yarn shortages in the global market.” Chronicle
