FOR those old enough to remember, yesteryear brands have all but gone. Woolworths, Truworths, Topman, Greatermans, Edgars and Sales House were among the long list of household brands for the well-to-do. The ambience in those outlets was distinct.
BERNARD MPOFU
Air-con cooled, friendly customer care teams and a feeling of “I have made it” enticed many customers into purchasing the wide array of merchandise on display. Decades later, everything has changed, such that the much younger fashion-conscious generation would think these brands belong in ancient times.
They know more about the street merchandisers known for their hailers who stand on sidewalks, bellowing along Harare’s First Street and the rest of the central business districts, seeking the attention of potential customers.
Most of these sell counterfeit brands of renowned global fashion labels, at incredibly cheap prices.
On the street, generators will also be humming due to power disconnection, as music blares out loudly from speakers.
Enter the boutiques, or “runners”, who are using the most of the real estate previously occupied by departmental stores like HM Barbours and other big brands.
If not in the CBD, boot sales and online shopping have in recent times become major sources of competition for established retailers. Runners have become the new name for small retailers taking on established brands head-on.
They import cheap clothing from the southern African region and abroad. Tanzania, South and Zambia have become the source of cheaper clothing, as the local textile industry bleeds.
For those with extra cash to spend, a flight to Turkey or the United Arab Emirates is all that is needed for a wardrobe make-over.
The state of affairs at yesteryear apparel retailers like Truworths Limited has put into sharp focus the pitfalls of Zimbabwe’s macroeconomic environment as the economy drifts into informalisation.
While the transformation of the clothing industry has led to the proliferation of smallsized retailers, employing thousands and obviously making the CBD more crowded, the big boys have paid the price for this. Edgars is on the ropes, and the list goes on.
According to the Finscope Survey, Zimbabwe could be losing millions of United States dollars in tax revenue after it emerged that 70% of micro, small and medium enterprises (MSMEs) do not keep accounting record. The Zimbabwe Stock Exchange Limited announced the voluntary suspension from trading in shares of Truworths Limited with effect from 7 March 2024.
“The suspension is for a period of three (3) months to provide Truworths with the opportunity to address the going concern aspects of the business and ensure compliance with ZSE Listing requirements regarding the publication of Audited Financial Statements for the period ending 9th July 2023,” the ZSE says.
“This temporary suspension aims to give Truworths the necessary time to rectify any concerns and meet the regulatory obligations stipulated by the ZSE. At Truworths’s request, the ZSE sought and was granted permission to suspend trading in its shares by the Securities and Exchange Commission of Zimbabwe pursuant to the provisions of Section 64 (1) (a) (ii) of the Securities and Exchange Act [Chapter 24:25].”
Before the suspension, Truworths had indicated that it would scale down its branch network. In its recently published unaudited financials, the group played out the impact of Zimbabwe’s growing informal sector on its doorstep.
“Units sold were negatively affected by informalisation of the economy which has resulted in cheap and fake imports selling below local and international manufacturing costs. The business could not viably compete against these imports,” Truworths said in its financials.
The World Bank recently noted that Zimbabwe’s unstable macro-economic environment is fuelling informalisation while limiting the formal sector’s access to capital.
“Price and exchange rate volatility, and large export surrender requirements have pushed many companies into the informal sector, limiting their ability to obtain financing from the banking system and further reducing the tax base,” the World Bank noted in its private sector report on Zimbabwe.
“Also, many foreign exchange transactions take place in the informal sector, further intensifying pressure on the parallel market exchange rate. Inflation has been consistently high (three digits in recent years) and reached more than 314 percent in 2023, with the local currency weakening at a fast pace.”
Experts say the collapse of big brands is symptomatic of the state of the economy. Zimbabwe’s economy recorded accelerated de-industrialisation in the past 30 years, blighting any prospects of making the country competitive in the region, as massive closure of major manufacturing companies relegated the country to an industrial wasteland.
While capacity utilisation of the few remaining manufacturing companies appears to be on a growth trajectory, studies show that several companies have closed shop in the country since 1992.
After self-rule in 1980, Greatermans offered upmarket shopping for both black and white clientele, with the store’s credit terms across affiliate companies Barbours and Meikles enabling many in Harare to enjoy the trappings of an affluent lifestyle from 35 departmental offerings including furniture, clothing, cosmetics and electronics.
Fast forward, several cities around the world have lost prestigious stores to competition from online shopping, but the closure of Greatermans was seen as a marker of Zimbabwe’s economic implosion as inconsistent government policies impoverished millions across the nation.
