Edgars US$ business surges by 100%

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 By Alois Vinga

ZIMBABWE Stock Exchange (ZSE) listed clothing retailer Edgars Stores Limited says US$ transactions have grown by 100% partly reflecting the extent of dollarisation in the economy.

Presenting the group’s annual performance for the period that ended January 7 2024, Edgars board chairperson, Themba Sibanda said the period witnessed a surge in the US$-denominated transactions.

“The US$ retail debtors’ book closed the period at US$12.6 million, representing a 100 % growth on prior year balance of USD6.3 million, whilst the ZWL retail debtors’ book closed the period at ZWL1.4 billion, a 43.8% decline on the prior year balance of ZWL2.5 billion,” he said.

Sibanda noted that the skew reflects the growing dollarisation in the market and the impact of high ZWL interest rates in discouraging credit sales, and borrowings in local currency.

“Active US$ accounts increased to 91K, up from 64K in prior year. The increase came from new account opening initiatives and account conversion initiatives employed in the last quarter of 2023. The asset quality remained strong at 80.1% for the US$ book and at 76.8% for the ZWL book,” said Sibanda.

The figures are consistent with data from the Reserve Bank of Zimbabwe (RBZ) which shows the usage ratio of US$: ZiG stands at around 80:20.

To this end, authorities have since put in place measures to encourage local currency usage such as tax payments by companies on the back of expectations that the local unit’s usage rate will significantly increase.

Meanwhile, during the just-ended year, performance across the group’s units was robust and defied economic challenges.

The Edgars chain recorded a turnover of ZWL139.3 billion, up 98.5% from the prior year of ZWL70.2 billion, and the 1.01m units sold were down 13.03% from 1,16m in the comparative period.

Total sales for the Jet chain were ZWL116.5 billion, up 107.34% from ZWL56.2 billion achieved in the comparative period. The ZWL sales had credit sales of 4.8% (2022: 43.1 %) and cash sales of 95.2% (2022: 56.9 %) while the USD sales had credit sales of 73% (2022: 70.3%) and cash sales of 27% (2022: 29.7%).