Edgars says it is opening new stores despite falling consumer spending that resulted in a 23% drop in volumes in the months to September.
Unit sales at Edgars stores were down 25% compared to 2018, although dollar sales traded 151% above the same period last year. At Jet, which caters for the lower end of the market, unit sales fell 23% while dollar sales were 146% above 2018. Clothing manufacturer Carousel recorded a 9% drop in the number of units sold.
“The group has not been spared from the impact of diminishing consumer purchasing power,” Edgars CEO Linda Masterson says in the company’s latest trading update.
Rising inflation and the depreciation of the local currency, reintroduced mid-year, have eroded incomes, leaving many consumer-facing companies reeling. This week, Pepkor, a unit of scandal-hit Steinhoff, announced it was withdrawing from Zimbabwe, where its Power Sales stores competed with Edgars’ Jet brands.
Despite the crisis, Edgars says it is adding new outlets to its store count.
“We opened a new Jet Store in Banket and secured premises for another Jet store in Chegutu which will open for Christmas trading. Edgars chain is returning to the Kadoma market and a new store will open there on Black Friday, 29 November 2019,” Masterson said.
Edgars is the country’s largest clothing retailer, with 25 Edgars branches and 25 Jet sores.
T’is the season
In terms of inventory, Edgars says it is adequately stocked to meet demand in the festive season, which is traditionally strong for retailers but could be hit by weak spending. Retail inventory at Edgars is up 454% from last year.
“We are planning for positive unit growth in the last quarter to December 2019. The business is committed to delivering growth to shareholders and good products at the best prices to our customers. We are geared to take advantage of any opportunities that arise,”
In September, Edcon, the troubled South African retailer, sold its stake in Edgars Zimbabwe to Mauritian investment management firm SSCG Africa Holdings. Edgars Zimbabwe’s split from the South African group had already taken a big step in March, when the two entities agreed on the US$1.5 million acquisition, by Edgars, of trademarks to brands owned by Edcon.