Sinokubonga Nkala
Judith Phiri, Business Reporter
GIANT clothing manufacturer, Carousel has reported a remarkable 70 percent increase in units sold during the third quarter, rising to 208 838 from 122 789 in the same period last year.
The surge in sales can be attributed to a successful retooling exercise that has allowed the Bulawayo-based company to expand its product range.
As a division of the Victoria Falls Stock Exchange (VFEX)-listed Edgars Stores Limited, Carousel is recognised as one of Zimbabwe’s leading clothing suppliers, offering a diverse selection of apparel for both adults and children.
In a trading update for the third quarter ended 8 October 2024, the group chief executive officer (CEO), Mr Sevious Mushosho said the increase in the units produced and sold through the chains contributed to a decline in the average cost of production.
“Units sold during the quarter increased by 70 percent to 208 838 from 122 789 achieved last year. The increase in the units produced and sold through the chains contributed to a 7,3 percent decline in the average cost of production,” he said.
“The sourcing of high-quality fabrics and use of modern machines is helping to provide our customers with high-quality garments of international standards at very competitive prices produced locally. The retooling exercise has enabled the business to widen its product range, becoming more strategic to the chains in stock management and profitability.”
He, however, said the group revenue declined by 6,81 percent against a 22,5 percent volume decline from 594 593 traded units last year’s third quarter to 460 598 units this quarter.
Mr Mushosho said the margins firmed 2,81 percent during the period, while this was on the back of procurement efforts focused on bringing in high-quality merchandise that sold at competitive prices compared to last year.
“Management has continued its efforts towards ensuring that fresher, high quality and more competitively priced merchandise is available in-store. Notwithstanding the challenging environment, the group sees emerging opportunities in the environment in its core and non-core offerings,” he said.
He said revenues for the Edgars Chain for the quarter declined 9,7 percent against 22,1 percent sales volumes declined from 255 561 units last year’s quarter to 198 952 units this quarter.
Mr Mushosho said revenues for the Jet Chain also declined 14 percent on the back of sales volumes decline of 21,9 percent from 334 897 units sold in the prior year’s third quarter to 261 634 units this quarter, while they opened a new store at Hogerty Hill in Harare during the quarter.
On the club plus microfinance, he said: “The business has streamlined its focus and now concentrates on relatively less risky deduction at source loan products. The loan portfolio increased to US$1,3 million by close of third quarter on the back of funding received from the group.”
Mr Mushosho said various investments in e-portals have resulted in improved efficiencies in loan approval and disbursement processes, while the group sees further growth prospects for this business in the coming year.
In the outlook, he said the group was encouraged by Government’s recent budgetary measures aimed at reducing illegal imports in the clothing sector and levelling the economic playing field.
“These measures, if fully implemented, will encourage local value addition, creation of jobs and underpinning the recovery of primary agricultural production thereby stimulating local economic growth.”
Mr Mushosho said the clothing industry also hopes that Government will capitalise on opportunities to strengthen the implementation of policies aimed at stabilising the local currency, expanding access to foreign currency through banking channels and improving liquidity management.
He said there was a need to also foster an environment that promotes increased economic growth from formal establishments in the interest of deepening the country’s growth prospects and economic resilience.
Mr Mushosho added: “Notwithstanding these challenges in the environment, the business is focused on strengthening its control of the value chain through rebuilding Carousel further as we aim to lower our production costs and continuously improve our quality, making our merchandise more competitive in the market.”
As a result, he said their efforts will be focused on cost containment as well as taking advantage of opportunities to grow their revenue, while the group is set to open a further two Express Stores in quarter 4, completing their revised target of eight shops for the year.
