Grant Pattison to lead Edcon from June
By Colleen Goko - May 26th 2017, 15:34
Current CEO Bernie Brookes’s contract, which was to expire in September, has been extended until the end of January 2018.
Edcon will again be under the leadership of a South African in 2018 when Bernie Brookes steps down as CEO to make way for former Massmart top man Grant Pattison.
Pattison would take the role of chief operating officer and CEO designate on June 5, ahead of the CEO position in 2018, Edcon said on Thursday.
“I’m not going to be naive and say that this job won’t come with challenges,” Pattison said on Thursday. “But someone has to step up to the plate."
“The challenge of restoring Edcon to its former glory is a privilege. Opportunities like this don’t come along often.”
Pattison’s appointment puts local talent back in charge of SA’s largest nonfood retailer following stints by American Stephen Ross, German national Jürgen Schreiber and Australian-born Brookes.
Brookes was appointed on a two-year contract. He steered the debt-to-equity deal that saw Edcon come under the control of its creditors.
Pattison has the challenge of revitalising the CNA brand, extending Edcon’s footprint in the rest of the continent and orchestrating a strategy for the future for the company. Pattison was at the helm of Massmart from 2007 to 2014. He navigated the sale of a majority stake in Massmart to US-based Walmart.
36One Asset Management analyst Evan Walker said the news of Pattison’s appointment was unexpected.
“Pattison is a good retailer but he has no experience in fashion and apparel. It certainly does come as a surprise. I’m sure he is very capable but I think he has the hardest job in the world,” said Walker.
In the year to March 25 2017, Edcon said that its group sales decreased 6.7% to R25bn. Sales at comparable stores fell 6.7%.
Edcon concluded a new agreement with Absa in late November 2016 to acquire 80% of all new credit applications for Edcon’s in-house second look credit book. As a result, the in-house book had grown more than 150% compared with the year-earlier period.
“Selling the credit book to Absa to begin with wasn’t a great decision,” said Brookes.
“But Bain would have sold their children if they could have at that point just to keep the business afloat. But the new agreement with Absa has contributed positively to stronger new credit sales.”
Absa bought Edcon’s debtors’ book in 2012. It was worth about R8.8bn then.
Brookes said Edcon had no interest in buying the book back and was happy to grow its own, which now reflected a value of about R800m.
The Edgars division, which includes Edgars stores, reported total retail sales of R10.2bn, a decrease of 6.7% compared with the year-earlier period.
Within the discount division, which includes Jet and Jet Mart stores, sales decreased 6.3% to R8.9bn, while comparable store sales decreased 5.7%.
The speciality division, which includes Boardmans, Red Square, Edgars Active, Edgars Shoe Gallery, Legit, CNA and the monobranded stores, reported retail sales of R5.5bn, a 6% less than the previous year.
“If I was younger, I would have loved to stay on for another three years or so,” said Brookes.
“But we are pleased with the appointment of Grant and we look forward to the improving fortunes of Edcon,” he said.© BusinessLIVE MMXVII
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