EDGARS Stores Limited says it remains committed to ramping up production and operational efficiencies at its Bulawayo-based Carousel Manufacturing Division, as the Group intensifies efforts to support its segmented retail chains, Edgars, Jet and the newly launched Express Stores.
In a strategic move aimed at restoring production to peak historical levels, the Group is targeting a monthly output of over 100 000 units, a milestone last achieved in 1999. At the beginning of the year, Carousel’s output had risen to 2 500 units per month up from fewer than 200 units just a few years prior.
Backed by a capital injection of over US$1 million, Edgars has embarked on an ambitious retooling programme to enhance production capacity, quality and efficiency.
“Management will continue to retool Carousel to underpin increased production and improve operational efficiencies to better support the retail chains. Smart merchandise procurement and optimal inventory planning remain key focus areas to ensure an optimal merchandise cycle that yields targeted margins without compromising the merchandise quality,” Edgars board chairman Mr Thembinkosi Sibanda said in a recent update.
Edgars
Carousel, one of Bulawayo’s leading garment factories, employs over 550 workers and supplies garments to Edgars and its subsidiaries across the country, as well as other retail outlets. The investment has already yielded results, with the Group reporting increased production efficiencies driven by an expanded order book and the recruitment of skilled machinists. This has allowed for scaled-up operations, improved delivery timelines and enhanced quality assurance.
“To cement these gains, the Group channelled US$1 million in capital expenditure towards maintaining and expanding production capacity. This was mostly towards automatic sewing machines, surface printers, boiler replacement and embroidery machines,” the company noted.
In line with its strategy to tighten supply chain control and improve margins, the Group also recorded a significant increase in input volumes from the Manufacturing Division.
“Input volumes attributed to Group sales increased by 58,2 percent, from 194 000 units in the prior year to 305 000 units,” added Mr Sibanda.
As part of its broader expansion strategy, Edgars said it plans to open four additional Express Stores before the end of the year while continuing investments in solar backup systems to counter anticipated electricity supply constraints.
“The business will make further investments in backup solar power, to improve system uptime and customer experiences in store and contain generator and grid electricity costs in light of projected reduced electricity availability in the outlook period,” the Group noted.
The firm’s manufacturing thrust received high-level endorsement earlier this year when President Mnangagwa toured the Carousel plant, underscoring its potential to boost economic output and employment.
Despite the operational strides, Edgars continues to face challenges in its retail segment. Retail merchandise revenue declined by 9,1 percent to US$30,7 million, largely due to a difficult macroeconomic environment characterised by inflation, currency volatility and subdued consumer demand.
Within this, the Edgars chain posted a turnover of US$17,2 million, down 5,3 percent, while Jet fell by 13,57 percent to US$13,4 million, compared to US$15,5 million in the prior year. Units sold also dipped 13,8 percent at Edgars and 16,9 percent at Jet.
The Group also reported a continued decline in credit sales under the ZWG facility, which dropped to 11,8 percent of ZWG sales from 17,2 percent in 2023. However, US dollar credit sales remained robust, accounting for 71,9 percent of total US dollar sales.
“The decrease came on the back of a decline in active accounts as customers navigated a difficult environment during the period and opted to reduce household borrowings,” said the Group.
Active US dollar credit accounts fell to 81 300 from 88 200, while the US dollar debtors’ book dropped by 7,4 percent to US$11,6 million.
Meanwhile, the ZWG credit book expanded to ZWG3,99 million.
However, Edgars remains upbeat about its targeted differentiation strategy, particularly with Jet, which underwent a strategic repositioning last year and is expected to yield results this year.
The Group reaffirmed its commitment to offering flexible credit options to stimulate consumer spending, even as it navigates a complex operating landscape.
COMMENTS