Farai Mabeza, Senior Staff Writer 
CLOTHING retailer Truworths says sales and profitability continue to be adversely affected by restrictive pricing laws, which negatively affect competitiveness against unregulated sectors.
In a trading update for the quarter ended October 9, 2022, Truworths chief executive Bekithemba Ndebele described the environment as uncertain and questioned the sustainability of the bank policy rate of 200 percent while bemoaning tight ZWL liquidity.
“The trading environment has remained complex and uncertain. The increase in the bank policy rate to 200 percent with effect from July 1, 2022 resulted in the business suspending all ZWL credit sales with a consequent reduction in units sold.
“ZWL cash sales were negatively affected by the severe shortage of ZWL as a result of the tight monetary policy,” Ndebele said. “In addition to US dollar cash sales, the business is selling in US dollars on a lay-bye basis.
US dollar credit is considered on a selective basis where there is assurance that the US dollar earnings are guaranteed and not an allowance.”
According to the update, all sales for the quarter of July 11 to October 9, 2022 were in cash compared to 58 percent recorded during the first quarter of last year, which saw the remaining 42 percent going to credit sales.
“The company applied for and was granted a further extension by the Zimbabwe Stock Exchange to publish the annual audited results by no later than January 15, 2023. This period will provide sufficient time to complete all audit review processes and conclusions thereof,” Ndebele added. Borrowings in Zimbabwe dollars totalled $56,35 million as of October 9, 2022, at a rate of 205 percent per year. There were no USD borrowings and there were no USD debtors.
This comes as the International Monetary Fund says as inflationary pressures ‘subside’ in Zimbabwe, the country must maintain a tight monetary policy and lift forex controls to keep inflation on its current path and prevent money supply growth.
“Currency and price pressures, which emerged earlier this year largely owing to a spike in broad money growth and an official exchange rate misaligned with market fundamentals, are subsiding,” the IMF said after its latest routine mission to Zimbabwe. The IMF however warned that renewed domestic and external shocks were adversely affecting economic and social conditions. n
