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OpenEdgars CEO And CFO Leave The Company Amid Leadership Change
Edgars, a clothing retailer, recently made changes to its leadership in an effort to improve its struggling performance. The company has replaced its CEO, Tjeludo Ndlovu, and its Chief Finance Officer (CFO), Happiness Vundla, according to newZWire. These changes come as the majority shareholder, Sub-Sahara Capital Group (SSCG), takes steps to revive the company’s fortunes.
Tjeludo Ndlovu, who had been serving as CEO since 2020, has stepped down from her position and left the company with effect from October 31. Happiness Vundla, who was appointed as CFO in 2021, has also left the company. Their departures mark a significant shift in Edgars’ leadership.
The new CEO, Sevious Mushosho, is a former executive of SSCG. Mushosho joined the Edgars board after SSCG acquired a majority stake in the company from South Africa’s Edcon in 2019. His appointment as CEO reflects SSCG’s influence and its commitment to turning the company around.
Like many formal retailers, Edgars has been facing declining profits due to various challenges. Currency distortions, rising inflation, and competition from the informal market have all contributed to the company’s struggles. Additionally, the COVID-19 pandemic dealt a severe blow to Edgars, resulting in a loss of seven trading weeks in 2021 due to lockdowns. When the stores finally reopened, Edgars found itself with a surplus of old merchandise that customers did not want, affecting the company’s stock turn levels. To clear the excess stock, Edgars had to resort to putting the merchandise on sale.
Financially, Edgars faced additional challenges. In 2021, the company had to increase borrowing to cover rental and utility costs, as well as ensure timely payment of employee salaries. The central bank’s sharp increase in interest rates to 200% in an attempt to combat inflation further exacerbated the company’s financial burden. As a result, Edgars reported a significant rise in finance costs.
The nature of the clothing retail industry adds to Edgars’ financial woes. The company must order and pay for merchandise six months in advance of its delivery. The merchandise is then sold over a six-month period. High-interest rates make it difficult for the company to generate profits from its operations.
Edgars, with over two dozen branches, is the largest clothing retailer in Zimbabwe. It also operates 25 Jet Stores and has additional subsidiaries such as the Club micro-finance unit and Carousel, a garment manufacturing factory based in Bulawayo.
SSCG, the majority shareholder, is a private fund based in Mauritius. It purchased a 41.75% stake in Edgars from South Africa’s Edcon in 2017. SSCG has connections to Innscor shareholders and has invested in various industries, including retail and micro-finance. The fund has been involved in supporting other troubled companies in Zimbabwe, such as airline fastjet and micro-finance company Untu Capital.
The appointment of Sevious Mushosho as CEO signals SSCG’s commitment to turning around Edgars’ fortunes. It remains to be seen how the new leadership will navigate the challenges facing the company and implement strategies to revive its performance in the highly competitive retail market.
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