Debtors drive Edgars operations

ZIMBABWE Stock Exchange (ZSE)-listed clothing chain, Edgars Stores Limited said its operations were sustained by payments from debtors during the 13 weeks ended April 30, 2021, with physical sales having been hit by hard lockdowns.

This was after government rolled out movement restrictions last year to contain the COVID–19 epidemic.

Normal trading only resumed on March 3, 2021.

The restrictions have been lifted but one of the country’s biggest clothing chains yesterday reported significant write-downs for the review period, noting that declining disposable incomes affected sales.

Edgars said traffic in shops also plummeted.

“The debtors’ book collections kept the company going during lockdown as most of our credit customers paid their instalments on time,” Edgars said.

“Lessons drawn from the first lockdown assisted the company in improving online payment platforms for our customers, hence a significant increase in collections during the second lockdown compared to 2020 lockdown.

“The company was able to honour its pressing obligations on time,” the statement said.

“Trading for this quarter was significantly affected by the COVID-19 lockdown as physical stores were closed for more than seven weeks of the 13 weeks in the quarter,” Edgars said, adding that online stores were open but recorded very little business due to delivery constraints during lockdowns.

Year to date turnover for the quarter to 11 April 2021 was down 17% in inflation adjusted terms and up 248% in historic terms compared to the previous year’s quarter.

Units sold for the year to date declined to 417 639 from 542 082 last year.

Inflation adjusted EBITDA was down 17% compared to last year as the group traded for just above six weeks in the quarter.

At Edgars chain, year to date unit sales of 132 120 were down 36,1% compared to the same period in 2020 with credit sales declining from 67,7% to 64,7% of total sales during the quarter compared to the previous year.

Edgars said Jet chain unit sales were down 42,2% for the period to date against 2020.

Cash and credit sales’ contribution was consistent with prior year at 52% and 48%, respectively.

At Carousel Manufacturing, unit sales of 42 757 were up 298,6% compared to last year.

The group’s financial services unit saw receivables declining marginally from $428 million in December to $420 million as at the end of March 2021.

Going forward, the company has noted with concern the continued impact of COVID-19 on business and disposable incomes.-newsday.cl.zw