Listed clothing retailer Edgars Stores Limited says consumer spending was suppressed in the interim period to July 7, 2019 owing to eroded purchasing power.

Zimbabwe has been experiencing frequent price hikes of basic goods and services since the beginning of the year, against stagnant salaries. This has continued to erode workers’ incomes, weakening consumer purchasing power.

“Consumer spending was suppressed, and continues to slow down, due to depressed salaries’ purchasing power. The prevailing liquidity challenges impact negatively on our stocking and growth initiatives while decimated consumer salaries continue to suppress demand,” Edgars chairman Thembinkosi Sibanda said in a statement accompanying the company’s financial results.

Sibanda said the group’s units declined by 17%, recording encouraging performance in terms of units only in April and May, while in June, it was negatively affected by the introduction of a mono-currency regime.

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Profit-after-tax for the period was $13,6 million, a 594% improvement from $1,9 million recorded in the same period last year.

Revenue increased from $32,1 million posted in 2018 to $62,85 million.

Edgars chain profit to sales ratio increased to 36,8% from 23% in 2018. Turnover improved by 93% to $37,6 million out of 25 stores from a 2018 comparative of $19,5 million despite units sold for the year decreasing by 25%.

Jet chain profit to sales ratio increased by 30% in the period under review from 16,7% in 2018. Total sales grew by 91% to $23 million from a 2018 comparative of $12 million, despite units sold being down 17% to $870 000 from $1,048 million in 2018.

The group’s manufacturing division posted a profit of $1,9 million while 6% of the sales were exports.

The micro-finance business revenue increased from $500 000 to $1,8 million, making a profit before tax of $1 million while loans to customers stood at $5,9 million.

Sibanda said Edgars would remain committed to providing compelling ranges to their customers at competitive prices and convenient locations.

He added that the group plans to open two new Jet stores in Banket and Chegutu as well as re-open the Edgars Kadoma store before year-end.

In May 2019, South African retail giant, Edcon, which owns a 41% stake in Edgars Zimbabwe through its wholly-owned investment vehicle, disposed of its shareholding in Bellfield Limited to Mauritius-based company, SSCG Africa Holdings.