The Zimbabwe Independent

Edgars sets sights on lowerincom­e segment

LISTED clothing manufactur­er and retailer Edgars Stores Limited plans to expand its reach in the second half of the year by launching 10 new Express Stores, targeting the lower-income demographi­c currently dominated by the second-hand clothing market.

According to Edgars chief executive officer Sevious Mushosho, the company faces challenges, including the proliferat­ion of cheap counterfei­t fabrics, intense competitio­n from second-hand clothing sellers and limited disposable income among civil servants, a key customer segment.

“The group is reintroduc­ing Express Stores to focus on the lower- income segment of the market which is currently dominated by the second- hand clothing market,” Mushosho said in a trading update for the quarter to April 7, 2024.

“Express Stores will, however, sell new clothes at very low prices ranging from US$ 1 to US$ 10, in the process restoring the dignity of our customers in that segment.

“Management continues to review working capital and financing models to capitalise on opportunit­ies that arise in the uncertain operating environmen­t. Due to rising costs, cost containmen­t remains a focus area.”

He said the retooling of Carousel Manufactur­ing, which is expected to increase the production volumes to 100 000 per month from 45 000, will lower production costs by making merchandis­e more competitiv­e in the market.

The group anticipate­s a reasonable outturn to year- end, given that cyclically, its volumes are skewed in favour of the second half of the year.

The new strategies layer comes as the group is facing some difficulti­es as its trading units fell by 18% to 455 010 this year from 552 771 last year due to a number of issues such as a variety of fiscal measures announced in the 2024 national budget.

“The period under review was characteri­sed by economic uncertaint­y because of steep depreciati­on in the local currency and lack of clarity in the manner and format of the anticipate­d currency reforms,” Mushosho said.

“In addition, the drought headwind became evident in the first quarter due to the dry spell conditions experience­d because of the El Niño weather phenomena.”

Despite the group’s traded units declining by 18%, the sales only dropped by 12% and the margin went up by 1%. — Staff Writer.