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Business Reporter
ZIMBABWE Stock Exchange-listed furniture retailer, Pelhams Ltd has secured $3 million from CABS to finance the company’s restocking exercise, official sources said yesterday. “The facility has been finalised and the company should be able to start draw downs next week,” said one source. “The money is for restocking. While it is understandable that domestic demand is low, limited stocks are also stressing the business.”

Pelhams, previously a market leader in furniture retail business was failing to build up stocks as a result of liquidity constraints. “Liquidity constrains remain a big issue,” said the source.

“Most of our branches are grossly under stocked and this is affecting our cash-flows.”
Pelhams recently used its debtors book to borrow close to $1 million to pay some creditors.

Pelhams chairman Mr Tawanda Nyambirai could not be reached for a comment yesterday. Several calls to the company were also not answered.
But last month, Mr Nyambirai said the trading environment was characterised by serious liquidity challenges, which resulted in depressed demand. During the full year to March 2014, the company recorded a loss of $3 million due to low sale volumes.

Mr Nyambirai said sales of goods for the year declined by 69 percent from prior year levels of $8,36 million to $2,6 million due to a combination of factors, which included the company’s challenges in stocking up its branches and declining demand for goods.

Current liabilities exceeded current assets by $4,2 million. Revenue dropped to $3,7 million from $11,4 million over the same period last year. “It is a tough situation,” another source said.

“Sales are still low but we are hoping the situation will improve once we have restocked. This will also enable us to give credit to deserving customers,” the source added.

“We are hoping that with the new CABS facility, things will significantly improve as this will enable us to resume business with our local supplies, most of whom we owe, and should be able to gradually settle our debts and also continue doing business with them.

Mr Nyambirai, also the chief executive of troubled Lifestyle Holdings, a manufacturer of household goods with similar retail network to Pelhams, took control of the group in September 2012 from former chairman Mr Oliver Chidhawu.