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CLOTHING retailer Edgars Stores says it sold around $1 million worth of products through its credit facility to informal sector customers in 2015.

Speaking on the sidelines of the company’s analyst briefing, Edgars group chief executive Linda Masterson said the performance of the facility was largely in line with “expectations.”

“We sold about a million dollars worth of products to informal sector customers last year, which was about four percent of Jet turnover and 1,8 percent of Edgars turnover .

“The bad debts are higher than they are in the formal sector, but so far it’s performing within expectations,” she said.

The performance of the credit facility to the informal sector is in line with the improved performance of the group’s Jet chain compared to its Edgars stores in view of customers’ preference for the discount chain in the present macro-economic environment.

Masterson told analysts that the retail group recorded a 12 percent dip in total comprehensive income for the 52-weeks to January 9, 2016, from a 13 percent decline in top line.

In respect of operations, the Edgars chain was largely responsible for the reduction in turnover due to a drop in its sales, which down 24 percent from the prior comparable period.

The decline in sale was attributed to a high base of extended credit that was launched in the prior year. On a positive note, the Jet Chain’s turnover rose 23 percent to $19,1 million from $15,6 million previously. Correspondingly Jet’s contribution to consolidated group turnover jumped from 22 percent in 2014 to 31 percent in the period under review.

Jet’s profitability also improved to 7,5 percent of sales from 4,5 percent in the prior comparable period “on the back of credit and the benefits of scale,” said the group.

With regards to credit management, the group said total trade debtors were $31,1 million net of provisions for doubtful debt of six percent.

Meanwhile, Masterson said the group will this year close its Jet Store in Kariba and Edgars branch in Chipinge as the two have continued to incur losses.

“The stores that we are closing are the Jet store in Kariba and an Edgars store in Chipinge because they are loss-making,” she said. The closures are part of a restructuring process aimed to “enhance accountability, productivity and succession planning.”

Going forward, Edgars management expects performance to continue on a flat-line basis, although targeting to grow its number of accounts to 300, 000, while keeping finance costs below 4,2 percent.- BH24.