Edgars sales below in inflation but profit up

Edgars Stores, probably the biggest clothing retail chain in the country, saw its sales increase from $3.9 billion to $14.7 billion in the six months to 5 July.

But it was not happy with this growth of 279 percent because it was lower that the average inflation for clothing for that period which stood at 308 percent.

The company says the slow growth was due to low opening stocks in the first quarter and the shortage of cash in the second.

The shortage of cash adversely affected its cash chain Express Stores whose sales were also affected by higher prices.

The company says price resistance is now becoming more of an issue as more and more Zimbabweans find that their ability to access income is outstripped by inflation.

The situation was better for Edgars because the shortage of cash was mitigated by credit facilities.

The company, however, was forced to reduce its extended credit period from 12 to nine months.

The weak sales were compensated by a 427 percent growth in operating profit, which shot up from $1.1 billion to $5.7 billion.

Net profit increased from $656.2 million to $3.5 billion, an increase of 437 percent.

The company, which is famous for its red hanger sales, said markdowns were not necessary because of the rapid inflation.

Carousel performed well and was kept busy by the trading chains which were understocked at the beginning of the year following a better than expected Christmas season.

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