Edgars owner looking for buyers to rescue retailer
|Published
FILE PHOTO: Shoppers walk past an Edgars store at a shopping centre in Soweto, southwest of Johannesburg FILE PHOTO: Shoppers walk past an Edgars store at a shopping centre in Soweto, southwest of Johannesburg
JOHANNESBURG - Edcon Holdings Ltd.’s administrators are fast-tracking a plan to sell all or parts of the business to keep South Africa’s second-largest clothing retailer in operation amid the Covid-19 pandemic.
Interested buyers will be invited to carry out due diligence with binding offers expected by the end of June, according to a rescue plan released on Tuesday. Salaries have continued to be paid through this month and remain a priority, according to the plan. Johannesburg-based Edcon has at least 18,000 workers, with suppliers employing thousands more.
The owner of the Edgars and Jet chains filed for administration last month after losing 2 billion rand ($119 million) in sales as a result of South Africa’s lockdown to contain the new coronavirus. Clothing stores were among those forced to close for five weeks through April, and were only allowed to open with limited ranges in May.
The company had been struggling before the crisis, securing 2.7 billion rand from lenders, landlords and the Public Investment Corp. in a 2019 restructuring plan that freed the retailer of all interest-bearing debt. South African consumer spending has been lackluster for several years as weak economic growth and high unemployment eroded disposable income.
Administrators led by Piers Marsden and Lance Schapiro opted for a sale plan after finding no investors for the business. A successful transfer of ownership will at least save some Edcon jobs, they said.