Stocktake: Edcon concludes Retailability sale, saving 5,200 jobs
The sale of parts of the Edgars business in South Africa to Retailability has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived.Wednesday, 16 Sep 2020
Edcon announced yesterday, September 15, that the sale of parts of the Edgars business in South Africa to Retailability has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived. The sale includes the transfer of approximately 120 stores in South Africa; together with the businesses conducted therein. Retailability, a fashion retailer and a holding company of store brands including Legit, Beaver Canoe and Style, operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.
A statement from the Edcon Business Rescue Practitioner said Retailability aims to ensure that ongoing operational business is its top priority, while integration work is moving ahead vigorously. The business rescue practitioners commented: “We are pleased that we were able to close the transaction within two months after the announcement. The closure of the transaction underlines the industry fit and the excellent compatibility between Edgars and Retailability’s strategic intent, infrastructure, and value chain. We are pleased by the significant saving of approximately 5,200 jobs as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand.”
The finalisation of the sale in South Africa indicates the achievement of a critical milestone in the Edcon business rescue plan. The parties will continue to co-operate and work towards concluding the sale of Edgars’ businesses in other various jurisdictions in Africa, namely Botswana, eSwatini, Lesotho and Namibia, where various regulatory approvals and conditions precedent remain outstanding.
In July, the Edcon Business Rescue Practitioners announced they had accepted a conditional offer from the Foschini Group (TFG) for the sale of parts of the Jet brand. TFG is home to a comprehensive portfolio of 29 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cellphones, and technology products; from value to upper market segments throughout more than 4,085 outlets in 32 countries. The Business Rescue Practitioners commented at the time that, “This conditional offer, which is still subject to the signing of definitive agreements, is a remarkable step in the business rescue process. It will not only result in the saving of a significant number of jobs, but together with the intended sale of Edgars to Retailabilty, it gives credibility to the Edcon business rescue plan and our ambition of delivering on the rescuing of the Edcon business.
“The South African economy needs the continuity of business in these unusual times of headwinds and change. We are pleased that these deals, if successfully concluded, will allow for that continuity and contribution to the economy, positively impacting the entire retail value chain, including suppliers and landlords. TFG is uniquely placed in terms of this niche market, infrastructure, and current leadership expertise to positively position the Jet business within its target markets and drive the business forward. Jet’s scalable business model with scope for further market share and growth ensures its sustainability as an established South African brand. There is alignment between TFG’s product and value offerings with the current brand and value offering of Jet.”
The Jet transaction will be finalised on the signing of definitive agreements that are targeted for this quarter, subject to various conditions precedent and regulatory approvals, including the Competition Authorities.
The closure of the transaction with Retailability to buy the Edgars brand, brings with it significant savings of approximately 5,200 jobs; as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand.
QUOTE of the week:
“The South African economy needs the continuity of business in these unusual times of headwinds and change. We are pleased that these deals, if successfully concluded, will allow for that continuity and contribution to the economy, positively impacting the entire retail value chain, including suppliers and landlords.” – Edcon Business Rescue Practitioners.
*Stocktake is a weekly roundup of current FMCG retailing and brand news, curated and edited by Retailing Africa Publisher & Editor, Louise Burgers. Keep the industry updated and send your announcements and news to: firstname.lastname@example.org.
Louise Burgers (previously Marsland) is the Publisher and Editor and Co-Founder of RetailingAfrica.com. She has spent over 20 years writing about the FMCG retailing, marketing, media and advertising industry in South Africa and on the African continent. She has specialised in local and Africa consumer trends and is a passionate Afro-optimist who believes it is Africa’s time to rise again and that the Africa Continental Free Trade Agreement (AfCFTA) will be a global gamechanger in the next decade.
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