HARARE – The Zimbabwe Stock Exchange (ZSE) has announced the delisting of embattled leading clothing manufacturer and retailer Edgars Stores Limited effective today, March 27th, 2024.
Trading in Edgars shares will be halted on the ZSE starting on Thursday to facilitate the settlement process.
This move follows Edgars shareholder approval for delisting and subsequent listing on the Victoria Falls Stock Exchange (VFEX) at an Extraordinary General Meeting held last Friday.
The ZSE has requested authorisation from the Securities and Exchange Commission of Zimbabwe (SECZIM) to finalise the transfer.
Investors will be unable to buy or sell Edgars shares on the ZSE during this interim period. If approved by SECZIM, trading of Edgars shares is expected to recommence on the VFEX on April 8th, 2024.
This development marks a significant shift for Edgars, transitioning from the Zimbabwean dollar-denominated ZSE to the US dollar-denominated VFEX. The company seeks to benefit from the stability and international reach offered by the VFEX.
Edgars announced earlier this year that it was facing a multitude of challenges that threatened its long-term stability. The company, once a retail giant, is navigating a difficult economic landscape characterised by macroeconomic instability.
Zimbabwe’s economic woes, including high inflation and an inconsistent exchange rate, make it difficult for the company to plan effectively. The constant fluctuation in currency value disrupts pricing strategies and erodes profit margins for almost all retail stores in Zimbabwe.
Edgars also cited the rise of the informal sector, which it said posed a significant threat. The company said it struggled to compete with the agility and lower prices offered by informal traders, who often source goods outside official channels.
While Edgars relies on customers with disposable income to purchase their merchandise, many Zimbabweans are struggling financially due to the economic situation. This decline in spending power directly impacts the company’s sales figures.
These factors combined led to a recent leadership overhaul at Edgars, with the CEO and CFO being replaced. The new leadership is tasked with finding innovative solutions to navigate these challenges.
The new leadership is now opting for VFEX.