WINDHOEK – Management of local Edgar’s stores parent company, Edcon Namibia, is tight-lipped about any possible implications for the more than 40 stores in Namibia and around 700 full-time and part-time employees as the group fights for its financial survival in South Africa. The troubled clothing retailer, Edcon South Africa, earlier this week confirmed that it is talking to possible new investors in efforts to ensure its survival.
Edcon South Africa owns various retail brands, including Edgars, Jet, CNA and Edgars Active and in South Africa alone employs approximately 14 000 permanent staff members and a further 25 000 temporary workers at around 1 350 stores.
South African media has reported that Edcon is drowning in debt of N$7 billion as it struggles to maintain its relevance in a clothing retail market infiltrated by local and foreign rivals.
Edcon Namibia is insistent that any communication about possible stores closures and job will have to come from the group’s headquarters in Johannesburg. Meanwhile, South African publication, Business Day, has reported that Edcon CEO, Grant Pattison, said on Monday that the group was negotiating new leases with its landlords as a way to cut costs.
Business Day’s sister newspaper, The Sunday Times, reported at the weekend that Edcon was close to liquidation and had asked landlords for help to reduce its rent in order for it to survive. Edcon’s statement confirmed it was talking to its landlords, and added that it was looking to outside investors.
“The group continues to review its strategic alternatives with respect to the group’s business and corporate and capital structure, including, inter alia, a merger or acquisition process,” reads the Edcon statement.
Edcon has been in South Africa for over 90 years but has suffered from slowing consumer demand and escalating debt. Its sales fell by 9.4 percent between October and December 2017, and adjusted earnings before interest, taxes, depreciation and amortisation slumped to 25 percent.
2018 sales have, however, already improved, Pattison said on Sunday.
His restructuring plan calls for Edcon to focus on Edgars, retaining discount retailer Jet and CNA.
Pattison is a former CEO of Massmart Holdings, best known for selling a majority stake in the company to Wal-Mart Stores in 2011.
2018-12-19 10:45:24 5 months ago