adminsell clothes imported from South Africa, China, Tanzania and the United Arab Emirates, among others.
The emergence of these clothing shops has forced traditional clothing shops, who have over the years sold locally manufactured clothes, to introduce credit as the only panacea to dealing with the onslaught of imported clothes.
Edgars Stores, which is arguably one of the country’s leading retail giants in the clothing business, was not spared from the market gyrations which decimated the retail market at the height of economic challenges that the country went through during the past 10 years prior to 2009.
This resulted in the retail giant closing some of its branches. Edgars’ roots can be traced back to the British growers’ fund that was established in the 1920s and was focused on promoting cotton production as a backward linkage to a sound textile industry.
Between 1980 to 1990, there was a 50 percent growth in textile manufacturing across the globe and a 61 percent rise in clothing manufacturing.
It is this background which gave birth to Edgars stores.
However, this growth was slowed by Esap when trade liberalisation allowed foreign products to dominate in the Zimbabwean market.
Edgars is one of the public quoted companies on the Zimbabwe Stock Exchange. The company was established in 1946 as Sydney Press in the City of Kings.
It became a listed company in 1974, which is the same period that Carousel, one of its factories, opened its doors.
A decade later Express Stores was launched and was rebranded to Jet in 2011.
Among the subsidiaries falling under the Edgars Stores are Edgars, Jet, Edgars Financial Services and Carousel.
From a peak of about 87 stores in 1992 falling to 34 stores at the adoption of dollarisation, the recession or backward trend of the counter was phenomenal in a negative sense.
It is in the same year that the population of accounts declined to slightly above 38 000.
Currently, an estimated number
of above 160 000 accounts are active. What it will take to rebuild the embattled stock to regain its lost position in the market is more of an internal matter than what the external environment can achieve.
The culture at the largest clothing retail chain has to change. My advice to top management is for them to change their way of doing business.
The challenges common at the store include unjustifiable interest rate charges on customer accounts, disregard of confidentiality clause, poor after sales service and a delayed online payment service.
With the financial service sector poised for a seismic shift after Finance Minister Tendai Biti’s last fiscal policy gave a decree on an urgent need
for revision of interest rate charges, it seems players such as Edgars financial services are absolved from the laws of the land.
Their application of interest rate charges to outstanding balances on customer accounts requires urgent attention.
In developed states such as the United States and Europe, the credit crunch which stifled the growth prospects of such economies has been emanating from credit card debts which saw customers trapped in bankrupt state.
Given the illiquid nature of this economy, it continues boggling the mind that interest rates even within retail shops such as Edgars stores cannot be revised downwards.
The confidentiality clause is a hallmark of any business notably the professionally run listed companies.
Cases of workers disclosing vital information about customer accounts are noticeable and there is evidence of such malpractices.
There is need for utmost respect for customer accounts. If staff members are not well trained to handle such business relationships, the impact can be wide and far reaching considering that the share price of a retail counter is in most cases influenced by stakeholder perception ahead of the balance sheet fundamentals.
Some of the customer complaints that involve lack of privacy in handling
of their accounts have not been addressed with a number of junior managers seemingly lacking knowledge and expertise on how to address customer concerns.
Whether one is a teller in a banking institution or a shop, it is tantamount to a criminal offence to “peruse” and share information relating to that specific account.
This is my call to the Edgars team to shape up on such malpractices or else the market will judge you harshly.
As the Consumer Council of Zimbabwe had turned to become a toothless bulldog, the consuming public should be given an alternative choice of recourse for unjust treatment.
In the 90s going backwards, Edgars Stores was a model for retail shops which had ambition to go public.
In addition, the shareholder value was also impressive as well as employment figures, which contributed directly to economic growth and development.
The failure by the group to timeously adopt to changing technological trends, however, delayed the implementation of e-payment platform.
This obviously heightened its exposure to risk as the telephone method of settling transactions is risky and antiquated.
The credit risk management for the group has been aggressive of late with the debt collection team leaving no stone unturned in managing their credit book.
The downside is when they fail to fully price the risk levels within the economy, a backlash might ensue knowing very well that Zimbabwe as an economy is over-borrowed and the most efficient means to manage such a market is to restructure the credit transactions.
Resorting to any other means can be more taxing to the quoted counter. It is the opportune moment we put brakes on the recession of our beloved brand, going forward the share price for the retail giant is expected to continue trading within an 8 cent range as no fundamental differences are to be realised as the year progresses.
The numbers of active accounts are bottoming out as there is no significant change in jobs data, the shift by the professionals from shopping in the CBD implies increased competition from other retailers as Edgars stores are not well represented outside the CBD.
Christopher Takunda Mugaga is an economist. He is also the Head of Research at Econometer Global Capital, a regional finance and economics research firm. He can be contacted on +263 772 340 353 / +263 776 266 or on [email protected]
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