Sales for Edgars chain, flagship company for the listed Edgars Stores Limited, went down by 50 percent in the third quarter compared to the same period last year, the retail clothing giant said in its latest trading update.
The Covid-19-induced lockdown which came into effect on March 30 and reviewed many times has affected disposable incomes for many and subsequently weighed down on the performance of several businesses in the country.
In the trading update for the 39 weeks ended October 4, 2020, Edgars Stores Limited group chief executive officer, Tjeludo Ndlovu, said there was a decline by half in Edgars chain’s unit sales.
“Unit sales of 453 752 were down 50% for the year to date against the same period in 2019,” said Ndlovu.
“Credits sales improved from 25% in the last quarter to 40% of total sales.
Overall, credit sales remained well short of the historical contribution to total sales of 70% to 75%.”
She said Jet chain unit sales of 771 893 were also down 43% for the period to date against 2019.
Cash sales, she said, contributed 88% and credit sales 12% of total sales for Q3 compared to 91% and 9% respectively in Q2.
However, Carousel Manufacturing, another division of Edgars Stored performed better than Edgars and Jet chains, recording an increase in sales during the period under review.
“Unit sales (Carousel Manufacturing) were up 142.7% for the period to date driven by Covid-19 masks in general and by the chains (Edgars and Jet) summer stocking programmes,” said Ndlovu.
“During the quarter the factory took delivery of Rights Issue financed machinery and commenced production of knit product.”
She said during the quarter under review, Edgars Stores Limited reviewed limits for customers with a good credit record upwards resulting in debtors growing from ZWL$64 million at the end of June to ZWL$123 million at the end of September.
“Civil servants continued to be a key customer segment constituting 34% of active accounts,” she explained.
“Credit reviews done in this quarter will drive sales in the last quarter where traditionally the business writes 60% of the year’s credit sales. Interest income grew 22% year on year in inflation adjusted terms in line with interest rate adjustments.”
Active accounts, Ndlovu said, deteriorated progressively from an average of 40.7% of total number of accounts during the first quarter to 32.9% as at the close of September trading month.
“This trend will reverse in Q4 as more account holders utilise their credit for Christmas shopping,” she said.
“Debtor’s collections continued the strong run from momentum gained in Q2. Average collections to debtors’ book were up to 34.7% compared to 28.1% in Q2 and 24.5% last year. The quality of the book continued to improve with “Current’’ account balances at 78.2%, up from 63.8% as at the end of June trading period.”
