Edgars, Turkish firm deal yields dividend. . . clothing retailer regains market footing

STRATEGIC partnership with Turkish firm and investments in its retooling drive have seen clothing retailer Edgars Limited Stores experiencing a resurgence in the market, shrugging off stiff competition from an influx of informal second-hand clothing vendors.

The listed entity says it is generating excitement in the market by offering premium, exclusive products targeting the affluent consumer segment.
The company forged partnerships in Turkey to enhance its offerings and invested US$1 million at its Carousel manufacturing in Bulawayo.

Carousel Manufacturing is expected to resume exports into South Africa before the end of the current year.
The development is expected to generate much-needed foreign currency as well as positioning the Group to benefit from ACFTA.

The retooling of Carousel is expected to increase production volumes from our highest of 45 000 per month to 100 000 per month.
In the first quarter of 2024, the Group improved its supply chain management by teaming up with local suppliers and boosting production at Carousel, strengthening quality control and reducing costs.

The strategic move increased the share of locally manufactured goods to 70 percent up from 50 percent the previous year, leading to job creation and enhanced profitability.

The group appreciates the Government’s efforts to bolster local industries and combat illicit trade in new and used clothing.
Edgars became the first clothing business to list on the fast-expanding Victoria Falls Stock Exchange (VFEX).

The company’s chief executive officer, Mr Sevious Mushosho, said to distinguish itself from small-scale traders and boutiques selling counterfeit goods, the company, in partnership with Turkish collaborators, introduced high-end, exclusive merchandise tailored for the affluent market segment, available in selected stores in Harare and Bulawayo.

The initiative has delighted customers, who now recognise the exceptional value offered by their preferred fashion retailer, he said.
“To differentiate our business from small mall traders and boutiques where imitation products are often sold, the business started production through its partners in Turkey, very high quality and exclusive merchandise to cater for the upper income segment of the market,” he said.

“This merchandise is being sold at selected stores in Harare and Bulawayo. This has created a huge excitement amongst our customers who are now seeing great value created by their favourite fashion retailer,” said Mr Mushosho.

Despite the group’s traded units declining by 18 percent from 552 771 last year to 455 010 this year, the sales only dropped by 12 percent and the margin went up by one percent. Mr Mushosho said the development was a reflection of procurement excellence that brought in high quality merchandise that sold at reduced markdowns compared to last year.

Volumes in the Edgars chain were down 12 percent from 231 614 units last year to 203 007 units this year.
“Sales were down by a mere two percent while the margin was up five percent year on year because of a deliberate strategy to procure high quality merchandise at a lower cost and sell at full margin at competitive prices with minimum markdown,” he said.

“The focus was on this flagship chain during the period under review. The split between credit and cash sales was 64 percent (2023: 65 percent) and 36 percent (2023: 35 percent) respectively.

“One new store is expected to be opened during the second-half of the year.”
According to the results, total units sold for the Jet chain were down 22 percent to 252 003 units from last year’s 321 157 units.
This is due to low opening stocks in ladies wear, footwear and menswear in the first two months of the quarter, the firm said.

The split between credit and cash sales was 63 percent (2023: 60 percent) and 37 percent (2023: 40 percent).
Four new stores are planned for opening during the second half of the year.

Units sold at Carousel manufacturing went up by 20 percent to 80 244 this year from 26 437 achieved last year.
The surge in the units produced and sold through the chains contributed significantly to the decline in Group cost of sales of 23 percent due to the increased production efficiencies.

The firm is confident that sourcing of high-quality fabrics and use of modern machines is expected to provide customers with high quality garments of international standards at very competitive prices produced locally.

“The retooling exercise will allow the unit to widen its product offering, becoming more strategic to the chains in stock management and profitability,” the group noted.
In the period under review, the debtors’ book declined from $13,2m in 23 December to $12,3m in 24 March as collections were higher than growth in credit sales.

Debtors’ collections were in line at 18,6 percent. It noted that with liquidity tightening, the business witnessed more customers opting for longer tenure of nine months to pay compared to six months.