Brands and stores affected by Edcon's new recovery plan

Brands and stores affected by Edcon's new recovery plan
Published: 05 July 2018 (1644 Views)
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 CEO Grant Pattison, who replaced Bernie Brookes at the helm of South Africa's biggest non-food retailer in February.

The 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 1,300-store footprint and cut floor space by 17% over five years to boost profitability, the CEO said 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 23 December and adjusted earnings before interest, taxes, depreciation and amortization 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.

Net debt at the end of 2017 was R4.2 billion ($306 million), compared with R24.7 billion 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.

- Bloomberg

Tags: Edgars, Edcon, Plan,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

Zimbabwe recent economic developments

by Staff reporter | 25 June 2019 | 58 Views

Mzansi crying out for Bev

by Staff reporter | 25 June 2019 | 55 Views

ZIFA dares Mliswa, Chizuzu

by Staff reporter | 25 June 2019 | 59 Views

Mnangagwa endorses the Zimdollar

by Staff reporter | 25 June 2019 | 52 Views

Obert Mpofu calls an urgent Zanu-PF Politburo meeting

by Staff reporter | 25 June 2019 | 82 Views

Khama Billiat smells blood

by Staff Reporter | 25 June 2019 | 52 Views

Zimbabwe's return to own currency is a brave move

by Dr Masimba Mavaza | 25 June 2019 | 50 Views

ZCTU promises shutdown over US Dollar banning

by Mandla Ndlovu | 25 June 2019 | 54 Views

Cyberwarfare is here

by Jacob Kudzayi Mutisi | 25 June 2019 | 42 Views

ZESA increases load shedding hours

by Mandla Ndlovu | 25 June 2019 | 52 Views

Mnangagwa succession: Race now wide open

by Staff reporter | 25 June 2019 | 58 Views

Govt orders 200 000 vehicle number plates

by Staff reporter | 25 June 2019 | 58 Views

MDC won't impose candidate for by-election

by Staff reporter | 25 June 2019 | 45 Views

'Mnangagwa political dialogue a joke'

by Staff reporter | 25 June 2019 | 50 Views

Govt splurges US$21m on legislators' vehicles

by Staff reporter | 25 June 2019 | 44 Views

Zapu asks Bulawayo to honour Dabengwa

by Staff reporter | 25 June 2019 | 48 Views

Nurses divided over negotiations

by Staff reporter | 25 June 2019 | 49 Views

'Mnangagwa presses self-destruct button'

by Staff reporter | 25 June 2019 | 47 Views

Mnangagwa bombing still under investigation

by Staff reporter | 25 June 2019 | 41 Views

Artuz leader fights for freedom

by Staff reporter | 25 June 2019 | 35 Views

Grace Mugabe hit with $4m lawsuit

by Staff reporter | 25 June 2019 | 38 Views

Error in Mawarire, ZCTU case

by Staff reporter | 25 June 2019 | 43 Views

Zanu-PF youths in 'name & shame'

by Staff reporter | 25 June 2019 | 31 Views

G40 kingpin calls for Mnangagwa-Chamisa GNU

by Staff reporter | 25 June 2019 | 36 Views

Mnangagwa's govt bans US$

by Staff reporter | 25 June 2019 | 36 Views

Zimnat and Sanlam continue to assist cyclone victims

by Agency | 25 June 2019 | 75 Views

Sick Robert Mugabe in Singapore

by Mandla Ndlovu | 25 June 2019 | 150 Views

Malema threatens to impeach Ramaphosa

by Mandla Ndlovu | 25 June 2019 | 102 Views

Obert Mpofu appears in court

by Mandla Ndlovu | 25 June 2019 | 147 Views

President Mnangagwa's full address to Zimbabweans

by Emmerson Mnangagwa | 25 June 2019 | 128 Views

Mnangagwa justifies Zim dollar return

by Staff Reporter | 25 June 2019 | 88 Views

ZHRO Vigil celebrates World Refugee week

by ZHRO | 25 June 2019 | 76 Views

ZANU PF officials clash over corruption list

by Mandla Ndlovu | 25 June 2019 | 210 Views

'ZANU PF now a threat to the country' says Biti

by Mandla Ndlovu | 25 June 2019 | 163 Views

The future of Slot Machines

by Staff Reporter | 25 June 2019 | 84 Views

SB Moyo and Chiwenga fallout?

by Mandla Ndlovu | 25 June 2019 | 229 Views