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CLOTHING retailer Edgars Stores’ profit plummeted by 90 percent in the six months to July from $1,18 million last year to $109,000, weighed down by retrenchment costs and low sales.

Revenue dipped by 23 percent to $23 million as a result of weakening consumer demand throughout the period.

The trend has been attributed to the combined effect of drought, prevailing liquidity constraints, business failures and delays or non-payment of salaries, which affected consumer spending.

The group has since cut jobs and restructured its business model to lower operating costs.

“These initiatives have resulted in extra once off costs amounting to $0,9 million being incurred . . . Further retrenchment costs have been incurred in the second half of the year which period the exercise was completed at a total cost of $1,4 million,” said group chairman Mr Themba Sibanda in a statement accompanying financial results on Friday.

Sales were 23 percent down to $22 million, with Edgars dropping 31 percent to $14,5 million. Jet sales marginally dropped 2,8 percent to $7,7 million on the back of credit accounts which now make up at 47 percent of the chain sales.

The manufacturing factory made a loss of $300 000 and the introduction of Statutory Instrument 64 of 2016, which restricts importation of fabric, affected its output.

The group reduced its borrowings by 34 percent to $15,4 million. During the half year period Edgars spent $1,3 million on capital expenditure.

Total assets declined by nine percent to $50 million.

Mr Sibanda, however, said the group expected a more profitable second half with the leaner business model set to help the firm meet the less than favourable economic conditions. No dividend has been declared. — The Source/Business Reporter