The Board of Directors is pleased to release the annual report for the year ended 31 December 2009. The following are the highlights from the Chairman's Statement
General Remarks
The period under review began in the fourth quarter of 2008 when hyperinflation was at its height. Results for that period are immaterial in as far as the final results reported are concerned. The first quarter of 2009 saw the establishment of the Government of National Unity and the first serious efforts to stabilize the economy. The beleaguered local currency was abandoned and the country moved on to the multi-currency regime...
Major Constraints
Stock carried over from the abandoned FOLIWARS (Foreign Exchange Licensed Warehouses and Retail Shops) period was not only tired and stale; it was also overpriced. There was therefore an urgent need to mark down and clear the old stock, and then re-stock the stores fully with fresh and competitively priced merchandise.
The number of stores from which the group was trading was now too high for the volume of business projected in the short to medium term. There was therefore a need to close or re-configure some of the locations. This became even more important because of rising occupancy costs as both landlords and service providers were pushing their rates up...
Results
The group traded at a profit only in the last three months of the period under review. Unfortunately this was not sufficient to absorb the losses of the earlier months that were first reported at the interims.
The Edgars chain performed weakly for most of the year because of poor stock levels. However as merchandise availability and variety improved during the year, so did performance. The fewer remaining stores became more productive and profitable...
Outlook
During 2009 management efforts were concentrated on re-building the business by downsizing, re-stocking the stores and resuscitating credit.
In 2010 focus will be on managing the business for profitability. This should be achieved from improved store productivity, healthier margins and higher stock turn...
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