Listed clothing retailer, Edgars Stores Limited, says trading in United States dollars (US$) will enable the group to fund imports and sustain operations in this harsh economic environment.
Board chairman, Thembinkosi Sibanda, said the foreign currency sales will help the group to be self-sufficient.
“The recovery to the business is premised on the back of improved access to foreign currency through domestic sales to cover import requirements, a stable exchange rate and slower inflation.
“Trading in foreign currency since April 2020 has allowed our retail chains to improve stock assortments, which in turn has increased traffic in our stores,” Sibanda said.
He said while a sizeable portion of our cash sales are in foreign currency, we believe that further relaxation of foreign currency trading will go a long way in increasing our US$ generation to fund imports,” Sibanda said.
In its financial results for the 26 weeks to July 10, 2022, Edgars reported a 114% revenue growth to ZWL$10.33bn from ZWL$4.82bn recorded in the same period in 2021.
“The growth in real terms is attributed to volume recovery, replacement cost-based pricing, ongoing cost management practice as well as initiatives implemented by management to ensure fresher stock availability in our stores, regardless of the supply chain challenges,” Sibanda said.
Basic earnings per share grew to ZWL$2.12 in the period under review from ZWL$0.33 in the prior comparative period.
Total group units sold increased by 35% to 1.27m from 0.94m in the same period last year.
Gearing reduced to 0.14 in the period under review from 0.21 in the prior comparative period.
Funding was channelled towards growing the debtors’ book as well as store expansion initiatives.
At the end of the reporting period, the company had US$262,000 foreign liabilities which it will be able to service from existing resources.
Sibanda said operating costs increased, specifically occupancy, employment, intermediated transaction tax and fuel costs.
However, Sibanda said management remained on recalibrating the business models in response to these price corrections to preserve value and build a strong balance sheet for the business.
He said management will continue to remodel the business to capitalise on opportunities that arise in the very uncertain operating environment.
Cost containment remained a focus area so as to ensure long-term viability of the business.
The group seeks to expand its geographic footprint through the opening of new stores in strategic locations.