MIK Meikles Limited

 
TIDMMIK 
 
MEIKLES LIMITED 
 
                            NOTICE TO SHAREHOLDERS 
 
Meikles Retail to return to profit and positive cash flows. 
 
This release is the first of two that will be issued to Shareholders prior to 
the forthcoming Annual General Meeting on 16 October 2014. 
 
This release will focus on the Retail Division and the second release will 
focus on progress made on matters that have been included under the heading of 
Finance and Outlook in the Chairman's Statement  for the year ending 31 March 
2014. 
 
The Retail Division consists of Meikles Stores, Barbours, and Meikles Mega 
Market. 
 
Shareholders are aware that this division was handicapped by a severe shortage 
of working capital following losses incurred by the stringent price controls 
imposed immediately before the introduction of the US dollar as the relevant 
currency in Zimbabwe and the discontinuation of the Zimbabwe dollar. The stores 
were forced by regulation to sell inventories at prices below cost. In recent 
years, the Group has operated without any benefit from its deposits held at the 
Reserve Bank of Zimbabwe. The Retail Division has been unable to invest in 
inventories or unit improvements as it should in a dynamic environment and 
losses have been made as a result. The Group has been unable to provide 
adequate financial support to the Retail Division. 
 
The Group will now have access to its funds held on deposit at the Reserve 
Bank. As a result approximately US$4 million will be injected into the Retail 
Division, which will have a material impact on the second half of the current 
financial year. We believe that the Division will return to profit and a 
positive cash flow in the second half of the financial year, while growing its 
market share. The Division is to focus on providing affordable products to the 
mass market while providing high-end fashion clothing and accessories through 
Barbours. Sales in Barbours are up on the previous year while sales in Meikles 
Mega Markets have been growing very rapidly. 
 
The Division is in the process of rationalizing costs through the 
centralization of its head office structure and combining all activities under 
a single structure and command with key focus on the provision of the required 
skills. 
 
The Meikles Stores will operate in all their traditional properties in 
Zimbabwe, but in space that will be smaller and more focused than in the recent 
past. The remaining space in each unit will be occupied by Meikles Mega Market 
and in certain units by TM Supermarkets. Meikles Mega Market is a rapidly 
growing participant in the Zimbabwe retail environment and we shall add more 
units in the high density suburbs of Zimbabwe. 
 
We are pleased to announce the launch of a new activity, beauty and hair 
salons. We view this as a rapidly growing market and have the capacity to 
establish businesses in spaces that are not being fully utilized by TM 
Supermarkets and Meikles Mega Market, the object being to secure beneficial 
occupation within all our various properties. We expect the beauty and hair 
salons to make an immediate impact and contribute positively to our profits and 
cash flows while making efficient use of our space. We have given this top 
priority and expect the first salon to be opened in October and others to be 
launched before the end of the year. 
 
Shareholders will witness these developments, which are now well underway, and 
will result in a revitalized Retail Division. 
 
It is expected that these developments will ensure that by the end of the 
calendar year, the Meikles' Retail Division, together with its sister company 
TM Supermarkets, will be the largest retailer in terms of sales in Zimbabwe. 
The Retail Division will be profitable, it will have strong positive cash flows 
and a strong management team with passion and focus. 
 
By order of the Board 
 
2 October 2014 
 
 
 
END 
 

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