Listed-clothing retail giant, Edgars Stores Limited says it lost 1 million units in sales compared to prior year levels as a result of the COVID-19 pandemic -plunging the company into a ZWL176.5 million loss for the year ended 10 January 2021.
The COVID-19 pandemic –induced hard lockdown disrupted business between Marc h and April 2020.
Consequently, units sold declined from 3.4million to 2.4million compared to the same period previous year.
Revenue was down 23 percent to ZWL2.1 billion and profitability down 320 percent to a loss of ZWL176.5 million in inflation adjusted terms.
“The decline in performance was due to a combination of two factors; (a) the business lost sales during the lockdowns as retail of clothing was not classified as an essential service (b) As reported last year the business closed the 2019 financial year with a lot of aged stock which when indexed had the unfortunate effect of distorting the value of cost of sales by significantly reducing the gross profit margin,” said Edgars chairman, Thembinkosi Sibanda.
In the retail segment, the Edgars chain recorded turnover of ZWL1.1 billion from ZWL1.75 billion recorded prior year out of its 26 stores.
Total sales for the Jet chain were ZWL896 million (2019: ZWL981 million) out of 27.
In the manufacturing segment, the factory recorded turnover of ZWL285m (2019: ZWL204m).
“The sale of face masks and other personal protective equipment contributed significantly to this performance,” said Sibanda.
Gearing marginally increased to 0.20 in the current year (2019: 0.19.
The credit environment remained challenging due to hyperinflation making value preservation very difficult and resultantly credit losses increased during lockdown period to 2.2% from 1.1% of the debtors’ book at 10 January 2021.
The gross retail debtors’ book closed the period at ZWL431m compared to ZWL423m as at the end of 2019 trading period.