eBusiness Weekly
Acquires bedding supplier n Records strong performance in Q1
Kudzanai Sharara
It’s hard to dream in hard times but it’s also the best time to dream, Axia Corporation’s chief executive officer John Koumides told the company’s shareholders this week following the company’s acquisition of a significant stake in Restapedic Bedding as well as recording a strong first quarter performance.The deal can be regarded as a backward integration as Restapedic is one of the suppliers to its speciality retailer TV Sales & Home. On its website, Restapedic says it has been making beds for the last 15 years and has developed a reputation in the local and regional market as a quality bed manufacturer.
Speaking at the company’s third Annual General Meeting, Koumides said the acquisition also provides the group with an opportunity to export.
“We will expand that business and there are some good opportunities to earn forex as well.”
While the deal to acquire a controlling stake in Restapedic is now before the Competition and Tariff Commission, Axia is already looking at making two other acquisitions.
Koumides said the Group was optimistic about the future of the business in Zimbabwe and is actively looking for opportunities in the local market.
As a group we are looking at two other expansion interests, especially in the retail sector, he said adding that the acquisition drive reflects the confidence that the company has in the country’s economy.
“That’s how positive we are about the group and that’s how positive about the country long term, and that’s how we will continue. They say it’s hard to dream in hard times but it’s also the best time to dream,” he said.
Koumides said despite operating in Zimbabwe being a “guessing game”, the group remains confident and has been going from strength to strength.
For the quarter ending 31 September 2018, two of the Group’s units’ TV Sales & Home and Distribution Group Africa had recorded very strong performances and high turnover. Volumes at TV Sales & Home were up by 31 percent for the period while volumes at DGA were up 21 percent in Zimbabwe. However, DGA’s business in the region was very tough although volumes still went up by 3 percent.
Koumides said despite the regional challenges, DGA will maintain a presence in both Malawi and Zambia.
“We often say it’s difficult doing business in Zimbabwe, but it’s even more difficult in the region.”
Transerve was also struggling with volumes coming off by 4 percent and its profitability shedding 5 percent. Meanwhile, this year’s Black Friday was the best trading day ever for TV Sales and Home, Koumides has said.
TV Sales & Home is one of the few Zimbabwean retailers that observed Black Friday, a day many stores across the globe offer highly promoted sales.
Edgars Chain, Jet Stores also offered huge discounts of up to 90 percent on selected items.
Without giving figures, Koumides said TV Sales & Home had had the best trading day ever on Black Friday.
Koumides, however said the company among other retailers have not received much support from the regulators, the Reserve Bank of Zimbabwe in particular in terms of foreign currency allocation.
“The tragedy of it all is that the allocation of forex, the retailers, in particular the distribution companies never seem to be mentioned in any budget or any document from the reserve bank, it’s always the miners and manufacturers, and agricultural companies, I am not quite sure how they expect the customer to buy his goods, you have to go to the retailers.
“It’s quite strange because this country has a very strong retail sector, which is the final route to market,” he said.
