Pelhams pins growth hopes on credit

HARARE - Zimbabwe Stock Exchange-listed furniture retailer Pelhams Limited (Pelhams) says it plans to further improve its credit terms to boost sales.

This comes as a greater part of most retailers’ sales are credit-driven as majority of Zimbabweans’ disposable incomes remain depressed.

The prevailing liquidity crisis has also worsened the situation.

Isaiah Mukudu, Pelhams chief operating officer, told businessdaily that increased sales would also help reduce dependence on securitising debtors so that finance income is retained in the business.

“Measures will also be put in place to increase space utilisation through exploitation of synergies amongst brands,” added Mukudu.

In his trading update two months ago, Pelhams chief executive Oswald Masoha said operations had been subdued since the beginning of the financial year in April mainly due to inability to access meaningful funding for the debtors’ book.

“The Pelhams model is driven by credit and in the absence of funding for the debtors book the operations are seriously affected,” Masoha said.

“2011 showed the potential in this business to grow and effectively leverage off its established brands, staff, branch network and systems. The establishment of a consistent funding model for the debtors’ book will contribute towards growth in the short-term,” he said.

Pelhams was recently taken over by businessperson Tawanda Nyambirai’s Lifestyle Holdings (Lifestyle) — formerly TN Financial Holdings (TNFH).

Nyambirai was given the nod to appoint six directors to the Pelhams board after the High Court awarded him ownership of 35 percent shareholding of the retailer he was contesting with chairperson Oliver Chidawu.

Chidawu has since been booted out as chairperson. At the company’s annual general meeting held in September, Nyambirai won 56 percent of the votes through TN Asset Management (TNAM) and Lifestyle Holdings resulting in the appointment of Rugare Chidembo, Alexander Gonese, Winston Makamure and Charity Chanetsa as Pelhams directors.

These changes come on the back of TNAM nominees, an investment arm of TN Holdings, acquiring Chidawu’s 36 percent stake of the company in a special bargain of 358 207 502 shares at 0,71c each last year.

Chidawu had used his shares to secure a $3 million loan from controversial businessperson, Jayesh Shah as collateral.

They were the same shares that Shah sold to TNAM nominees after Chidawu failed to honour his obligations.
Lifestyle, then TNFH, later bought an additional 22 percent stake in Pelhams, giving it a 58 percent effective control of Pelhams.

Lifestyle qualifies for a board seat for every 10 percent of equity held.

Pelhams’ business model is driven by credit sales. - John Kachembere

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