There are some businesses that are closing shop in Harare and we can link the closure to the tough operating environment which is characterised by the current cash shortage challenges and the unavailability of forex on the formal market. You can add to this the high cost of rentals where property owners are not willing to reduce rates down in line with the tough operating conditions.
Now it does not mean everyone is closing down, far from it….some are infact thriving The recent 800% increase in profits by OK Stores should be a world record! Most banks posted good profits, some businesses are being opened up and occupying vacant spaces left by other businesses.
Below we summarise our observations:
Clothing Sector: A number of boutiques in town have closed shop. A good case study can be found along first street in the capital. Chiedza House or formerly Southampton House witnessed the closure of Topics, a sad development as this shop had been around for decades. Visitors to Harare should find the space vacant and this applies to all boutiques which were on the ground floor of this building. You do not need to study Chiedza House in isolation, the trend is the same for all shopping malls except Sam Levy. A look at Avondale Shopping Centre, Westgate and Highglen shows that all is not well with the boutique sector. Some are retreating to their homes and some completely stopping to sell clothes and shoes.
Micro Finance Sector: One of the spaces that was occupied by a popular boutique at Chiedza house has a new owner..a microfinance house! It is not surprising to see this micro finance institution-the challenging times we are experiencing means that more individuals and companies will be borrowing. Most of the microfinance institutions are targeting civil servants and so we expect an upsurge in the number of microfinance institutions being set up around town and also in other parts of the country. If you are interested in investing in the short to medium term, then join the bandwagon. Your reference point is the published financial statements by all commercial banks during the mid year.
Hardware: A new hardware has been opened at Avondale near Bon Marche. The opening of this hardware did not ‘make sense’ to me in the first place. I got curious as to why this hardware is being set up when we already have other hardware shops at the shopping mall. A visit to this hardware several times has confirmed that the owners had done a good research! The shop is always busy and this applies to all hardwares in town. There is still demand for hard ware shops and investors are advised to look at new surburbs where demand for products is high and established suburbs where some are renovating their homes. Take an interest in hardware shops this weekend and find out for yourself.
Hairsalons: When we were looking for potential office for ZBIN, we went to Southerton Shopping Centre where we found vacant offices which have not been occupied for 2 years. Next to the vacant offices is a thriving hairsalon. We then got interest in finding out why the salon did not close whilst next door they closed shop. This was to be the start of analysis of salons and to our surprise, no salon has closed shop to date in town.
Car Parts Shops: Our brothers from Nigeria dominate this sector in Harare and there is none that have closed shop! Kaguvi Street or ‘Lagos’ is full of small shops owned by our enterprising brothers from West Africa and the reason for remaining open is an open secret-huge population of cars in Harare! A ZBIN member based in Mozambique did share with us photos of our brothers expanding businesses in that country especially in Chimoio, Beira and Maputo.
So this is the look at what is happening in the beautiful city of Harare, we have not covered all sectors and hope to follow up with more analysis. Our next review is going to be the city of Beira, do not miss this one.
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