On the same day that Edgars announced that its CEO was stepping down, two smaller clothing stores that didn’t exist in Edgars’ prime were busy fighting a social media war – selling suits for US$25.
Edgars and Truworths once dominated clothing retail, but they have no answer to the rapid destruction of what was once a large middle class in the economy. In its place is the 88% of workers who, according to Zimstat, work in the informal economy.
While Edgars announced changes, Jan Jam and its rival Suits World, were busy in a tussle. They are selling cheap suits, imported by the containerload from China and Turkey. Suits World advertised suits for US$30, using social media influencer Madam Boss to advertise. Jan Jam responded, selling suits at US$25. They are low quality, but, for many today, this is the very peak of clothing shopping.
It is all a sign of how things have changed, and how the traditional clothing retailers – just like the big supermarkets – have to contend with the decimation of the formal economy, which held their target market.
Edgars announced that CEO Tjeludo Ndlovu and her CFO Happiness Vundla were stepping down. When Ndlovu was appointed in 2020 – becoming the youngest member of the executive – she had the impossible job of steering Edgars out of COVID. Historically, credit sales – the hallmark of Edgars’ business model over the years – made up as much as 75% of total sales. When Ndlovu took over, those sales were 40%, having recovered from 25% in the previous quarter.
It got worse; government banned credit for a period, bringing credit sales to zero overnight. Then interest rates went up, after Edgars had borrowed to cover costs, including for salaries. Edgars lost seven trading weeks to lockdowns. When business resumed, Edgars found itself stuck with a large stock of outdated fashion, an apt illustration of how time has left the company behind.
“If I am selling clothes out of a suitcase during lockdown, I can easily get to my customers,” Ndlovu told Edgars’ Club magazine a few months after her appointment. “But if you are Edgars or Jet, you can’t do that, and very quickly your customer may forget about you.”
To get to customers and adapt, Ndlovu stepped up online sales, including selling via WhatsApp. But there was much else wrong with the market.
Civil servants once made up the biggest group of credit customers at Edgars. Today, the poorly paid teachers have deserted these stores. Decades ago, upwardly mobile professionals would buy locally made Van Heusen shirts. Shopping at Edgars was a sign that you were going up. Now, when they do have a bit of money to spare on fashion, they call “runners” who bring clothes in over the border. The age group that remember Edgars, and the feeling of shopping there, is now much older. The younger, bigger market that never shopped at Edgars at its prime cannot identify with the brand.
Sales at Edgars’ Jet stores continue to fall sharply. This is supposed to be the low-end brand of Edgars, but it is now a luxury store compared to the thousands of boutiques that line the streets of Harare’s crowded CBD.
Forced to sell at the official exchange rate, Edgars has no chance against the competition, and their dated merchandise doesn’t help.
As it stands now, Edgars does not have an addressable target market.
Edgars has appointed a new CEO, Sevious Mushosho, a former executive of SSCG, the fund that controls Edgars. In this economy, and in its current model, he would need to be some sort of miracle worker to turn Edgars around and compete again.
He would need a radical move away from the Edgars model as we know it, and follow the market where it is. All this will be hard to do, as long as its aisles are still dominated by fashion that nobody wants, and as long as its legs are still in regulatory shackles – pricing at the formal exchange rate and taxes.
What can he do? Very little. Out are the snazzy in-store catalogues with models selling the latest fashion. Here come Madam Boss and Nijo, selling US$25 suits on Facebook.