One of the biggest regional retail clothing companies, Edgars, has closed most of its shops in Zimbabwe and retrenched hundreds of workers due to depressed business.
Edgars is a subsidiary of Edcon, a South African-based clothing, footwear and textiles retailing group. It operates stores in South Africa, Botswana, Namibia, Swaziland and Lesotho.
Zimbabwe’s Edgars has failed to recover from a 2007 decree by the previous government of President Robert Mugabe, forcing business to slash back prices by half under Operation Dzikisai Mutengo (Reduce Prices).
The price cut decree knocked many companies to their knees as seen by many that were forced to either downsize operations or close shop altogether since there were running at a loss, resulting in widespread shortages of almost everything.
Edgars stores was not spared the crisis as seen by its move at the time to temporarily close some of its branches countrywide, thereby inviting an angry response by the Mugabe government that later threatened to take-over its firms.
Edgars Zimbabwe managing director, Raymond Mlotshwa, in an interview, said the company’s retrenchment exercise was meant to ensure survival as business was depressed.
“The half-year financial results showed depressed demand in the clothing sector, therefore, we have retrenched some workers to improve conditions of those remaining as the company was failing to pay them proper salaries,” said Mlotshwa.
“Our workers are getting low wages and salaries. As a sector, we see our fortunes closely linked to those of our economy,” he added.
Meanwhile, the retail chain has introduced a three-month credit facility as part of its efforts to boost sales.
The credit facility had been suspended to hedge against the world record breaking inflation levels in Zimbabwe that topped 231 million percent officially and over a billion according to economists and independent financial institutions.
Edgars Zimbabwe is offering interest-free credit with three months to pay but customers are required to deposit at least 25 percent on each purchase.
The government has adopted multiple currencies to lift troubled Zimbabwe industries that are still struggling to find their feet following a decade long crisis that saw most of them operating at a tenth of their full capacity.