Edgars engages informal sector

Business Reporter
LISTED clothing retail chain, Edgars, has introduced a scheme that allows customers in the informal sector to open credit accounts as it seeks to increase market share.

An official from the credit department at one of Edgars’ branches in Bulawayo who requested anonymity told Business Chronicle the scheme, which was introduced last month, allows the informal sector to buy clothes on credit.

The scheme is payable over nine months on installment.

“We’re now offering credit facilities to the informal sector and the credit scheme is paid over a period of nine months. This facility isn’t available throughout all our branches in the city but only at our Herbert Chitepo Branch, formerly Sales House,” said the official.

“The credit facility has been introduced as part of our efforts to increase our market share.”

The retail chain has not been spared from liquidity constraints given stiff competition from flea market operators and other established retail outlets.

To open an account, customers in the informal sectors are required to produce a copy of their national identity cards and proof of residence.

In the interim financial results for the half year ending July 5, 2014, Edgars number of accounts had grown by eight percent to 203,728 while retail sales were up eight percent to $29,5 million.

The company’s profit after tax remained flat at $1,6 million while trade and other receivables increased by 19 percent to $22,7 million.

Edgars’ core business is the retailing of clothing, footwear, textiles and accessories.

Through its credit and cash stores, the retail chain aims to supply its customers with quality merchandise at competitive prices.

The first Edgars store opened in Bulawayo in 1946 and the company went public in 1974.

A total of 1,4 million shares were on offer to the public and the issue was over-subscribed by 9,88 times.

To hedge against potential risks associated with erratic supplies and stockouts which could easily damage service delivery, the group acquired Carousel Clothing factory in 1974 and the Jeans Company in 1993.

In 1984, another retail brand called Express was introduced and its first store opened in Harare and by 1988 there were 24 Express outlets.