- Unit sales declined by 55.1%
- ZWL credit sales were suspended
- US dollar credit sales were introduced to fight competition
Harare- Clothing retailer, Edgars Zimbabwe Limited opened the new fiscal year to end in July 2023 with depressed perfomance after capping the first quarter ended 9 October 2022 with total sales down by 55.1%.
In a trading update, the Group said the economic environment remained turmoil, courtesy of tight monetary policies that affected customer purchasing behaviours through limiting ZWL liquidity and high borowing costs.
The trading environment remained complex and uncertain due to the increase of the bank policy rate to 200% in July 2022. Resultantly, Edgars suspended all ZWL Credit Sales with a consequent reduction in units sold.
The Group’s borrowings in ZWL as of 9 October 2022 amounted to ZWL56,35 million at a cost of 205% per annum signifying the impact of record 200% repo rates.
However, despite that, the government revealed on the second of December 2022 that the tight monetary policy stance will remain intact up to the first quarter of 2023.
Meanwhile, ZWL cash sales were negatively affected by the severe shortage of the Zimbabwe dollar amid a tight quarterly reserve monetary policy.
Unit sales declined by 55.1% during the period under review.
Sales and profitability continued to be adversely affected by the restrictive pricing laws, which negatively affect competitiveness against the unregulated sectors.
As a survival means from a field congested by brands such as Truworths and Topics, the Group introduced US dollar credit sales to its customers.
“In addition to US dollar cash sales, the business is selling in US dollars on a lay-bye basis,” the Group said.
“US Dollar credit is considered on a selective basis where there is assurance that the US dollar earnings are GUARANTEED and not an ALLOWANCE.”
However, the Group remains pessimistic about the outlook due to high borrowing costs courtesy of 200% interest rates and a tight monetary supply.
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