Zimpapers Logo

Business Reporter
Zimbabwe Stock Exchange-listed clothing giant, Edgars Stores Limited recorded a 22,3 percent jump in profits to $5,2 million for the 53 weeks to January 10 as the group’s focus on offering various credit option, improved assortments and superior customer services paid off.

According to the Edgars chairman Mr Themba Sibanda the various initiatives that were underpinned by the relaunch of the Club, which incorporated the Hospital Cash Plan, resulted in a 12,7 percent growth in revenue to $73,03 million from $64,8 million in the prior period.

“Of importance was the successful management of the resultant growth in the debtor’s book. Productivity improved across the board but markdowns were high due to the need to clear aged stock.”

In terms of its retail operations, Mr Sibanda said the top line for its Edgars chain shot up 9,1 percent after it launched the Club and extended in the form of a 12 months to pay option for its customers. Profitability for the business, however, fell by 6,6 percent due to discounts offered to clients during the year.

“We will continue to focus on cost control, account growth and customer service,” he said.

The Jet Chain on the other hand increased its contributions to the group to 21,6 percent from 20 percent due to management efforts to improve pricing and product assortment.

The chain’s turnover was up 20 percent while like for like growth stood at 2,4 percent and profitability rose 30,3 percent.

Stock management also improved with the chain’s closing stock cover being 12,1 weeks down from 18,5 weeks at the end of 2013. On credit management, the group said there was no deterioration in the quality of its book as the growth in the debtor’s book was well managed.

Mr Sibanda said there was likely to be a slight deterioration this year due to company closures and challenges in the economy. The group had 168 763 active accounts by the end of last year. Average gross hand-overs for the period amounted to 0,4 percent of lagged debtors and 1,9 percent of lagged credit sales.

“Recoveries averaged 42,1 percent of bad debts handed over up from 34,6 percent during the prior period . Total trade debtors were $33,2 million, net of an allowance for doubtful debtors of 2 percent, which we believe is more than adequate.”

Interest bearing debtors balances amounted to $18 million,” he said.

The manufacturing division’s profit before tax rose to $409 667 from 341 905 while productivity and unit sales increased 24,4 percent and 15 percent respectively largely due to the focus on menswear through “Quote”, the in-house brand.

“Ladies and Children’s ranges also experienced good growth over 2013.

We are confident that we have captured the men’s market for smart casual wear and this line will continue to be a great contributor this year as the brand becomes better known in the market.

Basic earnings per share was up 2,02 cents from 1,68 cents.