Edgars reports a 23% slump in revenue for FY21

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  • Revenue declined by 23% to ZWL2.1 billion
  • Edgars chain recorded a turnover of ZWL1.1 billion
  • They will be opening two new stores in the first half of 2021 and are looking for compelling locations to grow their footprint.

HARARE – Clothing manufacturer and retailer, Edgars Stores Limited reported a 23% decline in revenue for the full-year ended 10 January 2021 to ZWL2.067 billion due to the business losing sales during the lockdowns as retail of clothing was not classified as an essential service.

This compares to ZWL2.670 billion recorded in the previous year.

Profitability for the period was down 320% to a loss of ZWL176.5 million in inflation-adjusted terms, compared to a profit of ZWL80.2 million recorded in the prior year due to a reduction in sales where the units sold declined from 3.4 million to 2.4 million compared to the same period last year.

In addition, as reported last year the business closed the 2019 financial year with a lot of aged stock which when indexed had the unfortunate effect of distorting the value of cost of sales by significantly reducing the gross profit margin

Trading in foreign currency since April 2020 has allowed retail chains to improve stock assortments, and the business introduced an in-store remittance agency, where diaspora remittance beneficiaries collect their money from selected branches and this boosted foreign currency sales.

Edgars which operates famous brands such as Edgars Chain stores, Jet Chain, and Carousel manufacturing, also highlighted the Edgars chain recorded a turnover of ZWL1.1 billion compared to the ZWL1.75 billion reported the prior year.

“Units sold for the year were ZWL$887.7 thousand compared to the ZWL$1.39million recorded in the prior comparative period,” the Group said.

Meanwhile, total sales for the Jet chain were ZWL896 million down from the ZWL981 million reported last year out of 27 stores, units sold for the year were ZWL$1.28m.

In the financial services sector, the gross retail debtors’ book closed the period at ZWL431m compared to ZWL423m as at the end of the 2019 trading period. The credit environment remained challenged by high inflation, making value preservation very difficult.

As expected credit losses increased during the lockdown period to 2.2% from 1.1% of the debtors’ book at 10 January 2021 whereas the microfinance loan book, like the retail book, faced similar challenges in value preservation. The loan book closed at ZWL30.3m compared to the ZWL28.9m reported last year.

Commenting on the outlook, the Group’s chairman Mr. T Sibanda said management continues to remodel the business to capitalise on opportunities that arise in the very uncertain operating environment.

“Available foreign currency will be used to improve on merchandise ranges and assortments to grow turnover whilst at the same time escalating efforts to manage operational costs,” he said.

He also highlighted that they will be opening two new stores in the first half of 2021 and are looking for compelling locations to grow their footprint.

“Our online stores are fully operational for both Edgars and Jet, whilst Club Plus microfinance online loans uptake is growing underpinned by robust promotional activities to boost awareness,” Sibanda said.

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