Who would you bet on to deliver better financial results?A skilled salesman selling ice cream on a freezing winter day, or an ordinary one selling on a blazing summer afternoon?Edgars’ results remind me of the first: plenty of effort and execution — but the market just isn’t buying.
Thanks Tinashe for the great analysis and commentary as usual. Edgars results are not bad given they are recovering. The higher selling cost speaks of an ambition that needs re-alignment in terms of who their customers are, channels and platforms they are found. Also they have to make a decision, in my view, if they are pushing credit (microfin) or a clothing experience, from there determine whom a typical Edgars persona is like right to the pocket.
Being somewhat older and South African we draw your attention to some interesting facts about the history of Edgars in South Africa where it originated in 1929 as a family owned business (the Preiss family) and started with just one store!
A significant factor in the growth of Edgars was its decision to allow purchases of clothing on credit.
Another major innovation in the 1980s was the creation of the Edgars Club Magazine.
This was actually Edgar's way to get around the SA legislation at the time which prevented the running of lotteries (and the scheme lost its attractiveness years later when the SA Government introduced a National Lottery). Essentially by subscribing for a monthly magazine (the fee for which was added to your account) for R 5 per month, you were entered into a "Club Member's Draw" to win a monthly prize of R 1million. No account-holders could resist the temptation. In fact people rushed to open accounts (which significantly bolstered not only sales but also revenue via the finance charges which Edgars now collected - their debtors book swelled enormously!).
What was even more interesting was that the Edgars Club magazine cost Edgars not a cent to produce or distribute. In fact they created another revenue stream for themselves : because the suppliers of the clothing and other merchandise sold by Edgars were required to pay for the adverts relating to their products (and other stories and information on them) featured in the magazine.
Talk about selling ice to Eskimos.......Edgars back then really did know a trick or two!!
Kudos to them for posting profits in these trying times 👏.
That said, as a former Edgars account holder, I do think there’s a real need for product modernization, it could help even more. The assortment often lacks excitement, and there’s a stark difference between walking into Edgars South Africa and Edgars Zimbabwe. I know Zimbabweans tend to be a conservative bunch (hello ma two piece 👗👚), but… umm, times have changed.
And then there’s pricing...premium pieces outside the usual Kelso line often feel completely out of reach. A beautiful dress for $150? 💸 That might work in SA, where brands like Forever New and Sissy Boy thrive, but in Zim’s current context, is this strategy driving sales, or pushing loyal customers away? 🤔
How do you see edgars as a brand or the clothes they sell in the Zim context. Do you associate it as a high end brand or is it more links Woolworths Clothes in SA or is it more of a Mr Price?
Thanks Tinashe for the great analysis and commentary as usual. Edgars results are not bad given they are recovering. The higher selling cost speaks of an ambition that needs re-alignment in terms of who their customers are, channels and platforms they are found. Also they have to make a decision, in my view, if they are pushing credit (microfin) or a clothing experience, from there determine whom a typical Edgars persona is like right to the pocket.
Greetings Tinashe
Being somewhat older and South African we draw your attention to some interesting facts about the history of Edgars in South Africa where it originated in 1929 as a family owned business (the Preiss family) and started with just one store!
Refer to: https://nimblegroup.co.za/the-edgars-group-from-rags-to-riches-and-back-again/
A significant factor in the growth of Edgars was its decision to allow purchases of clothing on credit.
Another major innovation in the 1980s was the creation of the Edgars Club Magazine.
This was actually Edgar's way to get around the SA legislation at the time which prevented the running of lotteries (and the scheme lost its attractiveness years later when the SA Government introduced a National Lottery). Essentially by subscribing for a monthly magazine (the fee for which was added to your account) for R 5 per month, you were entered into a "Club Member's Draw" to win a monthly prize of R 1million. No account-holders could resist the temptation. In fact people rushed to open accounts (which significantly bolstered not only sales but also revenue via the finance charges which Edgars now collected - their debtors book swelled enormously!).
What was even more interesting was that the Edgars Club magazine cost Edgars not a cent to produce or distribute. In fact they created another revenue stream for themselves : because the suppliers of the clothing and other merchandise sold by Edgars were required to pay for the adverts relating to their products (and other stories and information on them) featured in the magazine.
Talk about selling ice to Eskimos.......Edgars back then really did know a trick or two!!
Very informative. This makes sense
Kudos to them for posting profits in these trying times 👏.
That said, as a former Edgars account holder, I do think there’s a real need for product modernization, it could help even more. The assortment often lacks excitement, and there’s a stark difference between walking into Edgars South Africa and Edgars Zimbabwe. I know Zimbabweans tend to be a conservative bunch (hello ma two piece 👗👚), but… umm, times have changed.
And then there’s pricing...premium pieces outside the usual Kelso line often feel completely out of reach. A beautiful dress for $150? 💸 That might work in SA, where brands like Forever New and Sissy Boy thrive, but in Zim’s current context, is this strategy driving sales, or pushing loyal customers away? 🤔
Pricing is a challenge especially since we always compare with South Africa where a lot of a the higher income earners do their clothes shopping.
How do you see edgars as a brand or the clothes they sell in the Zim context. Do you associate it as a high end brand or is it more links Woolworths Clothes in SA or is it more of a Mr Price?
I’d actually liken Edgars Zim to Edgars SA, they’re in the same lane. Woolies is a tier above, in design, quality and price point.
It comes off as, not high end, not quite mass market either... just somewhere in the middle.
Makes sense. So as you mentioned, a $150 dress is to expensive for the brand positioning.
Precisely.
Timing matters indeed. Its always smart to observe and respect the basics.
Comparative vs. Competitive Advantage? Your strategy has to be focused on the customer. Did Edgars’ strategy meet this criteria?