Edgars credit sales up 89pc

HARARE - Despite delayed salary payments and reduced disposable incomes in the market, listed clothing retailer, Edgars Stores Limited (Edgars’) credit sales grew by 89 percent in the first half of 2012.

The company’s sales have been picking owing to reintroduction of credit facilities in 2010 after it had suspended the product due to hyperinflation.

“Credit sales went up by 89 percent of the chain and 74 percent of group retail sales with unit sales increasing by 2,8 percent,” company chairperson Thembinkosi Sibanda said.

Edgars however, has huge outstanding amounts that are long overdue on its books.

The company said the number of debtors’ accounts grew to 169 700 from 158 900 at year end which was slightly below expectations and active accounts stood at 74 percent as at the end of June this year.

“Average handovers were 0,4 percent and 1,4 percent of lagged debtors and credit sales respectively, which is in line with full year 2011 year end. Amounts past due have risen and therefore we expect bad debts to be higher in the second half.”

Sibanda however, said these debts will be more than covered by provisions which are at two percent of current debtors.

Its Edgars chain continued to trade in 23 retail outlets with turnover growing by 16,9 percent to $19,8 million being 83 percent of the total revenue of the company.

Express Store in Harare was closed and the space merged into Edgars.

Edgars said the company had relocated its Jet branch in Mutare, opened an additional site in Bulawayo with the opening up of a store in Chinhoyi bringing the total number of stores to 14.

“Turnover of $4,1 million was achieved reflecting a growth of 68,2 percent, being 17 percent of total revenue. Unit sales grew by 48,7 percent,” said Sibanda.

Its manufacturing arm incurred a loss of $141 424 for six months, which was better than last year by 31,2 percent with units sold increasing by 20 percent.

The clothing retailer said efforts were being made to obtain additional customers and enhancing productivity by increasing the product mix.

A total of $572 725 was incurred on capital expenditure with establishment of new stores gobbling half of the budget.

Other expenses were on information technology systems, hardware and plant equipment among others.

Going forward, the clothing manufacturer said plans to seek long-term funding for its operation were ongoing and at an advanced stage.

“We will continue to pursue growth opportunities whilst remaining focused on inventory and cash management as well as cost containment,” said Sibanda, adding that they expected profit after tax growth to be higher than sales growth.

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