Iconic Pelhams bounces back

26 Jan, 2018 - 00:01 0 Views
Iconic Pelhams bounces back Pelhams has started re-opening its branches across the country

eBusiness Weekly

Scheme of arrangement rescues the company

Restocking of outlets underway

Martin Kadzere
One of Zimbabwe’s oldest furniture firms Pelhams has started re-opening its branches across the country after TN Harlequin, one of its creditors and sister company, undertook to bailout the company to avoid liquidation.

Pelhams was delisted from trading on the Zimbabwe Stock Exchange in 2016 after the company violated some listing requirements. At that time, the company was facing operational and financial challenges, which saw it failing to pay its debts to TN Harlequin and other creditors due to the fall in consumer demand and failure by the company’s debtors, who were are predominantly civil servants, to pay their debts.

The company then said the trading environment was tough, characterized by unprecedented liquidity challenges. This resulted in subdued consumer demand, especially for capital goods and caused failure by debtors to repay debts at all, or on schedule.

Sale of goods significantly declined due to a combination of factors, which included the company’s challenges in stocking up its branches and the declining demand on capital goods.

This prompted TN Harlequin to place the company under liquidation after the refusal by the other shareholders to support its request to recapitalize the business. Both Pelhams and TN Harlequin are majority owned by businessman Tawanda Nyambirai.

In exchange of liquidation, a scheme of arrangement was mooted, which resulted in TN Harlequin undertaking to pay all other creditors and re-open Pelhams retail outlets.

Nyambirai told Business Weekly in an interview yesterday that the company had started re-stocking its outlets with furniture products being supplied by TN Harlequin.

“We are taking orders from TN Harlequin and very soon we will fully re-open most of our outlets,” said Mr Nyambirai.

“We are starting with local products and avoid importing obviously that is to do with competiveness issues, which might affect our pricing.”

He said the re-opening had been made possible after the scheme of arrangement, which saw TN Harlequin agreeing to pay off the creditors and re-open Pelhams shops.

Founded in 1949, Pelhams was listed in 2002 after having been unbundled from a restructuring Delta Corporation.

Prior to delisting, trading of Pelhams shares on the ZSE was suspended on December 10 2015.

TN Harlequin Luxaire is one of the largest household furniture manufacturer and retailer in Zimbabwe. The company has been in the furniture business since 1955 as Federation Furnishers and grew organically through the acquisition of other furniture businesses namely Springmaster and Harlequin Furniture. It manufactures lounge furniture, beds, and case goods. As part of its supply chain management strategy, TN Harlequin acquired the assets of Wood Industries a saw mill based in Bulawayo.

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