HomeBusiness DigestDebt-ridden Tedco to streamline operations

Debt-ridden Tedco to streamline operations

Roadwin Chirara

TEDCO Ltd is streamlining its operations as part of efforts to service its crippling debts and reduce increased operational expenses.

etica, sans-serif”>The company has targeted the shelving of some of its operational retail brands such as Radio Ltd and Blooms.

Tedco’s decision to shelve the brands is said to have been influenced by the continued reduction in earnings from the two brands mainly because of their targeted markets, which were mainly the middle to high-income earners.

Tedco chief financial officer, Glovah Madzima, confirmed the company’s position regarding the restructuring of its operations.

“We are not disposing of the brands, but mainly putting them on ice, of which we will revisit after we have completed the restructuring of our operations,” said Madzima.

He said the company was currently interested in consolidating its Nyore Nyore brand mainly because of its market appeal and increased sales volumes.

He said the decision would see sales outlets which had been trading under Blooms and Radio Ltd being rebranded under Nyore Nyore.

“Overall our sales volumes have been coming from Nyore Nyore and we see no reason why we should not create a brand that would increase sales while at the same appealing to overall markets including the middle to low income base,” said Madzima.

He however said despite the low sales volumes at its clothing retail labels — House of Kumali and CW Fashions — the company would continue to operate the brands.

“We are going to continue using House of Kumali and CW Fashions as our fashion and clothing base of which we believe with the time the two brands are likely to grow and add value to the company,” said Madzima.

He confirmed that the company had to dispose some of its properties in efforts to service its debts and obligations.

“It’s necessary to dispose of unneeded assets and obligations and this has allowed the company to achieve its objectives in terms of debt repayment and as you can see, we believe now the company is sitting in a comfortable position,” said Madzima.

He said the company was not planning to introduce any new brands onto the market, but aimed at growing its bedding brand — Sleep Eezzy — which was launched at the beginning of the year.

“We have no plans for any new brands, but we are only looking at also growing our bedding brand, Sleep Eezzy,” said Madzima.

Tedco is said to be planning to increase the bedding brand branches from the current eight to a possible 15 during the course of the current financial year.

Madzima said its manufacturing arm, Tedco industries was now being accounted for as an associate company while its export volumes were suffering from the current exchange rate offered to exporters.

“The exchange rate has made exports from out manufacturing arm uneconomic and this is having a significant negative impact,” said Madzima.

Tedco group was last year, as part of its restructuring, demergered into two units — Tedco Retail and Tedco Industries.

The deal resulted in the company entering into a partnership with Steinoff International Ltd of South Africa where the company bought 51% into the manufacturing arm of Tedco in exchange for a cash injection and debt servicing arrangement.

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