Edgars’ profit up 324 percent

The hyperinflationary conditions in Zimbabwe which have boosted consumer spending saw retail chain Edgars increase sales by 194 percent and net profit by 324 percent during the year ended January 4.

It says the presidential elections in March 2002 should have heralded a period of calm and economic stability but political controversy continued and the economic challenges facing the country were not resolved.

The country’s economy shrunk by a further 12.5 percent. Exports which had peaked at US$3.1 billion in 1996 fell to US$1.2 billion last year resulting in a serious shortage of foreign currency.

This saw the parallel market rate of the Zimbabwe dollar against the greenback soar from $80 at the beginning of 2001 to $1 500 at the end of 2002.

Inflation peaked at 198.9 percent in December. Price controls introduced by the government in an effort to curb inflation backfired as the products resurfaced on the black market further fuelling inflation and shortages.

The company, however, weathered all the negatives with net sales increasing from $4.4 billion to $12.9 billion.

The 194 percent increase in sales beat both the average inflation for the year of about 140 percent as well as the clothing and footwear inflation of 183 percent.

The Edgars chain remained the mainstay of the company contributing 63 percent of the sales.

Turnover from Express chain increased by 192 percent while the star performer was the manufacturing division whose trading profit increased by 344 percent.

The company’s net profit increased by 324 percent from $712.2 million to $3 billion.

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