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The Jet Stores contribution to group turnover jumped to 27,1 percent from 18,8 percent last year after it introduced credit sales

Clothing retailer, Edgars Stores recorded a $1,2 million net profit for the half-year ending July 11 this year but bemoaned the drop in consumer spending power driven by economic challenges the country is facing.

The group, which also encompasses Jet Stores and Carousel, registered a minor increase in revenue to $30 million from $29,9 million as it lamented a period of job loses following the landmark July 17 Supreme Court Judgement that saw over 25 000 workers being fired after employers were allowed to dismiss workers on three months’ notice.

Heightened job insecurities among other forces saw the group recording a 1 percent drop in merchandise sales to $29,3 million.

“Fast declining economic fundamentals, combined with low disposable incomes and heightening job insecurity have undermined consumer confidence and demand,” Edgars Stores chairman Themba Sibanda said.

The group did not declare a dividend while basic earnings per share improved to 0,46 cents from 0,44 cents last year.

Clothing retailers have also been hit by an influx of second hand clothes although the Government has moved in and banned the imports.

Mr Sibanda said a decision allowing Jet Stores to introduce credit sales had paid off as its contribution to group turnover jumped to 27,1 percent from 18,8 percent last year.

“This was achieved through granting of credit facilities to customers throughout the chain. Until mid-April 2015, Jet was offering credit only in test stores that were mostly in outlying centres,” he said.

He said direct factory sales had dropped 3 percent, with an export programme having been mooted to boost sales.

Mr Sibanda said the group was carefully managing its debtor’s books which had slightly deteriorated due to the tough economic environment.

“Total trade debtors were $29,8 million of net provisions for doubtful debt of 6 percent, which provision was increased as a conservative reaction to the deteriorating trading environment. Ten percent of the debtors’ book related to Jet customers,” he said.

Debt recoveries had slumped during the period to average 28,7 percent down from 32,6 percent last year.

A total of $1,1 million has to date been spent in upgrading the group’s information technology systems in a move that Mr Sibanda said is expected to result in “significant cost savings” due to expected improvement in business processes while about $300 000 was invested in plant and equipment.

Going forward, Mr Sibanda said “productivity and deep cost cutting measures have been formulated” and were being implemented to improve the group’s financial performance. – New Ziana.