Tedco mulls divesting from clothing retail

Eric Chiriga


ZIMBABWE Stock Exchange-listed Tedco is considering disposing of its interests in the clothing retail sector.

Tedco chairman, Simba Mangwende, said they were currently evaluating their ownership of the clothing manufacturing unit.
<
BR>“Our continued ownership of the clothing manufacturing operation is under review,” said Mangwende in a statement accompanying the group’s results for the 53-week period to January 7.

Tedco is the holding company for House of Kumali, an up-market clothing retail firm. Numerous companies, including furniture retail firm Pelhams, have cut back on their credit facilities as galloping inflation continues to erode consumer disposable incomes resulting in high rates of default.

Tedco consists of a retail division, which is a third of total operations, selling white goods, furniture and clothing.

The other two thirds consist of the manufacturing division, primarily involved in the production of furniture.

Mangwende said the company’s retail division had however entered 2006 in a better shape compared to previous years.

He added that the manufacturing division was growing.

“The manufacturing business, whose turnover now comprises 60% exports, continues to grow.”

Mangwende said while the bulk of exports had traditionally been to South Africa, the group had enjoyed a huge increase in demand for its products in Zambia and Malawi.

Tedco recorded a turnover of $342,2 billion, a 408% increase from $67,4 billion in the previous year.

The group’s operating profit increased to $50,1 billion from $5,5 billion, representing 811%.

The retail division posted a turnover of $188,8 billion compared to $50,8 billion in the previous year while the manufacturing division registered a turnover of $313 billion against $17,3 billion the previous year.

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