Advertise with fastmoving.co.za
 
 

Edcon Holdings’ latest recovery plan includes closing chains including Red Square cosmetics and La Senza lingerie and attempting to lure their customers to its flagship Edgars clothing stores.
Edcon Holdings’ latest recovery plan includes closing chains including Red Square cosmetics and La Senza lingerie and attempting to lure their customers to its flagship Edgars clothing stores.

Edgars parent to close Boardmans, La Senza and other chains in recovery plan

RETAILER NEWS

By Janice Kew, Bloomberg - Jul 6th 2018, 07:39

Edcon Holdings’ latest recovery plan includes closing chains including Red Square cosmetics and La Senza lingerie and attempting to lure their customers to its flagship Edgars clothing stores. 

The move is the brainchild of new Chief Executive Officer Grant Pattison, who replaced Bernie Brookes at the helm of South Africa’s biggest non-food retailer in February. The 89-year-old Johannesburg-based company has long struggled to stay afloat amid weak consumer spending and economic growth and had to be taken over by banks and bondholders in 2016 to avoid collapse.

Under Pattison’s strategy, Edcon will reduce its more than 1 300-store footprint and cut floor space by 17% over five years to boost profitability, the CEO said on Wednesday. The retailer will focus its attention primarily on Edgars, which already sells most of the ranges available in the stores that will close. Edcon will also retain discount clothing specialist Jet and its CNA chain of stationery stores, though Boardmans homeware is set for the chop.

“I do think the company can turn,” Pattison said. “The quicker we can do this, the better.”

Suffocating debt

The urgency comes as Edcon’s retail sales fell 9.4% in the three months through December 23 and adjusted earnings before interest, taxes, depreciation and amortisation slumped 25%. The company’s owners include Franklin Templeton, Sanford C Bernstein & Co LLC and Harvard University Pension Fund, which took over Edcon when it was suffocating under foreign-currency debt used to finance its 2007 takeover by Boston-based Bain Capital Private Equity LP.

With more than 14 000 permanent staff, Edcon is a significant employer in a country where more than one in four people are out of work.

Net debt at the end of 2017 was R4.2bn, compared with R24.7bn the previous year. Earlier attempts at reviving Edcon included increasing the workforce, slashing prices and introducing international brands. The latter policy was reversed by Brookes, who led the company for a little over two years.

Edcon said in March it was in discussions with creditors about refinancing debt to strengthen the balance sheet. The company has a liquidity facility and credit facilities maturing at the end of September.

Pattison is a former CEO of Massmart Holdings and is best known for selling a majority stake in the general goods retailer to Wal-Mart Stores in 2011.
Fin 24 

Read more about: retailer | retail | edgars | edcon |

Related News

The changing UX and CX landscape
13/09/2019 - 16:16
An exceptional customer experience (CX) builds a foundation of loyalty and trust. Similarly, a positive user experience (UX) encourages brand connections with people wanting to come back for more. And yet, local organisations must learn to embrace these more effectively to differentiate themselves from their competitors.

Footgear gets go-ahead to buy Edcon's footwear brands
13/09/2019 - 09:24
Footgear, the South African retailer of branded and non-branded footwear, on Thursday received the green light to purchase the assets and business associated with Edcon Limited’s Edgars Active and High Key brands.

Ackermans launches A-list Summer collection
12/09/2019 - 11:08
With winter’s icy grip on the country, it's hard to believe that summer is around the corner. The onset of warmer days means that it’s almost time to ditch the winter wardrobe and embrace a lighter, brighter one. However, selecting a summer wardrobe can be a daunting experience, as consumers are spoilt for choice and simply don’t have the time to sift through the top trends - particularly when on a budget.

Shoprite boosts support for small-scale farming in local communities
12/09/2019 - 10:48
“Siya Kolisi” enthralls spectators in the streets of Langa, Cape Town, with his tackles and accurate passes, but this is not the 28-year-old Springbok captain. It is in fact 13-year-old Luxolo Ntsholo who has adopted the moniker.

Online shopping business to shake up retail sector
12/09/2019 - 09:40
Allsale Club is a members-only online shopping business that aims to save consumers money on everything from everyday branded items to luxury items.