Clothing and retail giant Edgars Stores Limited saw its profit dipping to $500 000 in 2016 from the comparable year’s $4,5 million after the group undertook its first retrenchment exercise in 70 years.
BY BUSINESS REPORTER
The retrenchment exercise cost $2,5 million, group managing director Linda Masterson told an analysts briefing in Harare yesterday.
She said the group was going into 2017 with a leaner structure.
Retail sales were down by 19,2%. Cash sales and credit sales were down by 12% and 22,3% respectively.
“The challenging trading environment and macro-economic conditions reduced consumer confidence and disposal incomes,” she said.
Credit sales constituted more than half at 68,4% with cash sales accounting for 31,6%.
Borrowings at year-end were $11,25 million down from $18 million. In the outlook, Edgars projects a 5% growth in turnover with profit after tax expected to rise by 400%.
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Retail sales for the Edgars chain decreased by 24,6% on 2015 figures.
Masterson said they were facing product sourcing challenges due to foreign currency shortages and also lost sales in the transition period from the old system to the new one.
Jet chain sales decreased by 7,6%.
“Decline in ladies wear, children’s wear, men’s wear and footwear affected chain topline performance. Supply chain challenges in fourth quarter affected sales performance,” Masterson said.
Carousel recorded a 28,7% decrease in sales.
Masterson said the unit recorded a 38% increase in sales to the open market, arising from the successful launch of the “Quote Ladies” brand and corporate wear sales. She said sales volumes to Jet Chain grew 18,5% but with a significant shift towards children’s wear while volumes to the Edgars chain retreated by 30,2%.
