Soft consumer demand hits cothing

THE clothing industry, which showed nascent signs of recovery around 2010, is huffing under the weight of cash shortages, softening demand and competition from smuggled second-hand apparel.

And clothing manufacturer and retailer Edgars Stores Limited seems to have suffered the most.

For the year ended January 9, the listed retailer reported that merchandise sales at US$50,3 million had declined by US$12 million from the same period a year earlier.

Net profit, as a result, narrowed to US$548 000 from US$4,6 million a year ago, representing an 88 percent drop.

Edgars Stores Limited board chair Mr Themba Sibanda said general uncertainty in the job market, particularly after suggestions that the civil service might be trimmed, and cash shortages, had dented consumer sentiment and, consequently, sales.

“The unavailability of money is obviously at the center of the slump,” said Mr Sibanda.

“We have a situation where Zimbabwe’s biggest workforce are civil servants, and you will remember that last year there was talk of retrenchments in Government and, in my view, this affected people’s spending because they were in a situation where they were not sure they will still be in their jobs for long.

In these situations, you then realise people become very cautious with the available dollar.”

In addition to declining consumer sentiment, restocking has also been a challenge.

Delays in making payments to foreign suppliers mean retailers are unable to restock quickly, a problem that is keenly felt during periods of peak demand.

Though Government banned second-hand clothing imports, the regulations are not being actively enforced.

Industry and Commerce Minister Dr Mike Bimha said on January 18 this year that the ban would only be enforced after the textile and clothing industry showed capacity to meet local demand.

Edgars generally caters for both the upper end of the market (through Edgars Stores) and the middle and lower ends (Jet Stores).

The apparel maker does not directly compete with second-hand clothing merchants, only selling new items.

Mr Sibanda said, “Our prices, however, are very competitive because if you look at our group, we have Edgars, which caters for what you will call the upmarket; then we have Jet for the middle class to the bottom end of the market, and that explains why we opened branches in such places as Gokwe and Chipinge.”

Industry and Commerce Deputy Minister Chiratidzo Mabuwa told Parliament on March 29 that local manufacturers were now able to produce clothes that compete with imports.

“... we also have two policies which are in line with resuscitation of industries in the entire country and in particular Bulawayo.

The two policies are cotton-to-clothing, and the leather industry development. This cotton-to-clothing policy was launched in Bulawayo so as to emphasise the earmarking to improve the textile industry, particularly in Bulawayo.

“The textile industry in Bulawayo has since been resuscitated and they are supplying Edgars with clothes manufactured in Bulawayo.

I would like this House to know that there is no reason to import suits and shirts for men because we have them in Bulawayo,” she said.

The more than 100 members of the Zimbabwe Clothing Manufacturers’ Association are targeting to grow their workforce to a combined 40 000 by 2020.

By 2014, the employees. sector had 7 500