Johannesburg - The majority of the clothing goods purchased by Edgars Consolidated Stores (Edcon) were locally manufactured, group chief executive Steve Ross said yesterday after the speciality retailer's annual general meeting (AGM).
"Over 50 percent of our purchases are locally manufactured and this was equivalent to about R6.5 billion in financial 2005, which is 20 percent more than in financial 2004," said Ross.
He added that 470 million garments had been imported from China in the year to April but that the four top clothing retailers, namely Edcon, Pick 'n Pay, Truworths and Foschini, had purchased only 25 percent of these imports.
This 25 percent figure compares with the 65 percent share of the clothing market that the four retailers are deemed to control, according to official statistics.
Ross said there were over 2 000 independent Chinese retailers that operated predominantly in small towns in South Africa.
He said these retailers and the informal retailers accounted for much of the imports from China.
On the implications of the loss of jobs in the textile and clothing manufacturing sector as a result of these imports, he said Edcon had created an additional 2 650 jobs during financial 2005. About 40 percent of these new jobs were casual.
At a general meeting held immediately afterwards, the AGM shareholders approved the resolutions necessary to implement the 10-for-1 share split and the staff black economic empowerment (BEE) deal.
About 17 000 of the group's 18 000 employees will benefit from the empowerment transaction, which will see about 10.6 percent of Edcon's equity allocated to an empowerment trust.
Edcon also released a trading update yesterday for the first quarter of its financial year, which showed that sales rose by 25 percent compared with the same period the previous year.
The better-than-expected performance saw the share price jump by R10.85 to a record high of R307.85. The general retailers sector rose 1.53 percent.
Although all the stores showed good growth, the Jet clothing chain stood out with sales growth of 31 percent, in an environment where selling prices were 23 percent lower than the previous year.
After taking into account the 6 percent growth in average retail space, this brought the like-for-like growth in the volume of units sold to 48 percent.
Analysts said Jet's performance benefited from very competitive pricing, which had led to an improved value perception, increased social grants and real wage increases.
The group said that earnings for the first three months were in line with budget and that the earnings guide for the full year, which was given in May and forecast to grow in excess of sales growth, remained appropriate.