Edcon

Edcon Limited is a retail company based in Johannesburg, South Africa. Its subsidiaries include Edgars, a department store with 203[2] branches.[3][4]

Edcon Limited
TypePublic
ZSE: EDGR
IndustryRetail
Founded6 September 1929 (6 September 1929)
FounderEli Ross
Headquarters
Johannesburg
,
South Africa
ProductsClothing, footwear, accessories, sporting goods
Servicesclothing retail, homeware retail, stationary retail
RevenueR28.7 billion
Number of employees
44,000[1]
ParentBain Capital
SubsidiariesEdgars Consolidated Department Stores
Websiteedcon.co.za
Edgars is the primary and original brand of Edcon.
A Jet clothing store in Cape Town.
A CNA book and stationary store.
A Boardmans storefront in Cavendish Square mall in 2016, two years before the brand was discontinued.

History

Edcon Ltd is the leading clothing, footwear and textiles (CFT) retailing group in South Africa trading through a range of retail formats. The first Edgars store was opened on 6 September 1929 in Joubert Street, Johannesburg by Eli Ross.[5]:106 It was listed on the Johannesburg Stock Exchange in 1949 and opened its first stores outside of South Africa in Botswana, Lesotho and Swaziland in 1966-69.[6] Since then, the Company has grown to ten retail brands trading in (as of 2014) over 1400 stores in South Africa, Botswana, Namibia, Swaziland, Lesotho, Ghana, Zimbabwe and Zambia.

In 1982 the company, still known as Edgars, was acquired by South African Breweries. It launched its Red Square retail chain in 1996 and acquired the struggling stationary retailer CNA in 2002 for R130 million.[7] The company acquired the houseware retailer Boardmans in 2004 for R94 million.[8]

Edcon Financial Services provides credit facilities and financial services products to the Group's over 4 million cardholders. In November 2015, according to reports, Edcon Limited referred to the National Consumer Tribunal.[9] In October 2017, it was reported that Edcon rewarded its customers with a revitalised ''thank U'' customer reward programme.[10]

Bain Capital concluded a private equity deal that delisted the group from the Johannesburg Stock Exchange in 2007.[11]

In early 2020, during the COVID-19 pandemic, the company ceased to pay rents for its retail locations while the resultant lockdowns in South Africa prevented businesses from operating.[12]

Financial trouble

Following the private equity takeover, Edcon had a succession of CEOs, lost significant market share, and struggled with an oversupply of leased floorspace. This was partly due to an increase in cheaper imported clothing and the increasing move to online shopping by customers.[13]

In 2016 the company recorded a net debt of R24.7 billion and was temporarily taken over by debtors to avoid financial collapse.[14] This resulted in the closure of 253 stores by 2018 as part of a recovery plan[15] and by 2017 the company had reduced its level of net debt to R4.2 billion. In July 2018 Edcon announced that it was closing its Boardmans homeware and La Senza stores.[14]

In January 2018, Grant Pattison became CEO.[16]

In December 2018 it was reported in the Sunday Times[17] that Edcon and its subsidiaries were on the brink of financial collapse and was seeking a deal with mall owners to reduce rental payments.[18] Edcon disputed the reports but did state that it was working towards a eliminating company debt and a deal to prevent the closure of its stores.[19][20] The possible 44,000 direct and additional 100,000 indirect job losses should the company stop trading was used to by trade union SAFTU to criticise President Ramaphosa's economic policies.[13][21]

Divisions
Brand Market Revenue[22]

(2015)

in millions of Rands

 Operating Profit[22]

(2018)

in millions of Rands

Edgars fashion 13 929 1 305
Edgars Zimbabwe fashion 799 101
CNA stationery 2 011 35
Discount/Jet fashion 10 771 1 220
Red Square fashion - -
Prato fashion CLOSED CLOSED
Boardmans homeware CLOSED CLOSED

Defined by the target markets served, all retail business is structured under two divisions:

  • Department Stores Division (serving middle and upper income markets):
    • Edgars (operates in Botswana, Lesotho, Namibia, Swaziland, South Africa, Zambia)
    • CNA (operates in South Africa, Lesotho, Botswana and Namibia)
    • Boardmans (operated in Botswana, South Africa, Namibia) (CLOSED in 2018)[23]
    • Prato (operated in South Africa) (CLOSED)
    • Red Square
    • Temptations (CLOSED)
  • Discount Division including (serving middle to lower income markets):
    • Jet (operates in Botswana, Lesotho, Namibia, South Africa, Swaziland, Zambia).
      • Jet Mart
      • Jet Shoes
    • Blacksnow (CLOSED)

The stock of the company is listed on the Johannesburg Securities Exchange and Zimbabwe Stock Exchange, and is part of the Zimbabwe Industrial Index.

References
  1. "Edcon Transformation Information" (PDF). www.edcon.co.za. Retrieved 2018-12-17.
  2. "Edcon - Retail Divisions". www.edcon.co.za. Retrieved 2018-12-17.
  3. "ZIM:EDGARS - Google Finance Search". finance.google.com. Retrieved 2017-08-31.
  4. "Edgars - Online Shop For Clothing, Shoes, Homeware & Beauty Products". www.edgars.co.za. Archived from the original on 2008-04-24. Retrieved 2017-08-31.
  5. Musiker, Naomi; Musiker, Reuben (2000). A Concise Historical Dictionary of Greater Johannesburg. Cape Town: Francolin. ISBN 1868590712.
  6. "Edcon - History". www.edcon.co.za. Retrieved 2018-12-17.
  7. "Edcon confirms CNA transaction". Fin24. 2002-10-10. Retrieved 2018-12-17.
  8. Staff Reporter. "Edcon buys Boardmans for R94-million". The M&G Online. Retrieved 2018-12-17.
  9. OFM. "Edcon Limited referred to National Consumer Tribunal". OFM. Retrieved 2017-12-18.
  10. "WATCH: Edcon's new thank U" programme hopes to bring back customers | IOL Business Report". Retrieved 2017-10-18.
  11. http://www.businessday.co.za/articles/companies.aspx?ID=BD4A446936
  12. Mahlangu, Kagiso (May 7, 2020). "Big standoff between retailers and landlords looms". bizcommunity.com. Retrieved June 6, 2020.
  13. "Edcon's liquidation would lead to the single biggest loss of jobs in SA | IOL Business Report". www.iol.co.za. 17 December 2018. Retrieved 2018-12-18.
  14. "Edgars parent to close Boardmans, La Senza and other chains in recovery plan". Fin24. 2018-07-05. Retrieved 2018-12-17.
  15. https://www.pressreader.com/south-africa/sunday-times/20180318/282660392950659
  16. "Grant Pattison to lead Edcon from June". Retrieved 2018-07-06.
  17. Child, Katharine (16 December 2018). "Crashing Edcon seeks relief from mall rents". www.timeslive.co.za. The Sunday Times. Retrieved 2018-12-18.
  18. Bell, Gordon; December 2018, Bloomberg / 17 (2018-12-17). "Edcon seeks agreement to reduce rentals, Sunday Times says". Moneyweb. Retrieved 2018-12-17.
  19. Sekhotho, Katleho. "Edcon CEO promises a debt free future amid financial woes". ewn.co.za. Retrieved 2018-12-17.
  20. "Boss of Edgars, Jet, and CNA denies report of 'collapse' that could close 1,300 stores". BusinessInsider. Retrieved 2018-12-17.
  21. "SAFTU APPALLED AT EDCON'S POTENTIAL JOB LOSSES". SAFTU. 17 December 2018.
  22. "Edcon - Five Year Group Review". www.edcon.co.za. Retrieved 2018-12-18.
  23. "Edgars to launch new 'Home' stores to replace Boardmans". businesstech.co.za. Retrieved 2018-12-17.
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