Retail giant Edcon Holdings has said that it was inching closer to reach a deal to recapitalise the group in a bid to stave off the looming collapse of what was once one of South Africa’s most profitable retailers.
This comes after weekend report by the Sunday Times that Edcon had sent out a letter to its 31 biggest landlords, asking for a two-year 41 percent “rent holiday” in exchange for a five percent stake in the business in a bid to stave off liquidation and the loss of up to 40,000 direct and 100,000 indirect jobs.
But Edcon chief executive Grant Pattison slammed the Sunday Times report as “irresponsible and sensationalist reporting”, saying that Edcon has been with this risk for some time and the group was close to a deal to fix the business.
“Edcon is very close to announcing a complete recapitalisation of the business that should endure for the next few years. We cannot comment on the details as it is not yet finalised. Speculation and sensationalism will harm, not help the company,” Pattison said in a statement.
“For the record, when Sunday Times asked us on comment late Friday, as they like to do, we said we can’t comment because the deal is not finalised. We ask them to wait a week so we could announce the signed deal. They refused.
“Edcon comments that parts of the Sunday Times article of 16 December 2018, and specifically its headline, are unfortunately speculative, misleading and sensationalist. Edcon has not ‘crashed’.The Group had a great sales day yesterday (15 December 2018) with sales up on last year.”
Pattison also called on workers not to panic, saying that their jobs were safe. Pattison has previously called for efforts to revive the local textile and retail value-chain in South Africa.
Edcon, the largest non-food retailer in South Africa which owns Edgars, Jet and CNA, has been struggling for the last couple of years to restructure its business in the face of cheap foreign imports onslaught and a move by consumers to e-commerce.
The group even launched Edgars Home in October in response to what customers had been saying about its product offering. The group is also allegedly also seeking R2 billion in emergency funding from its owners and the state-owned Public Investment Corporation to stave off its mountain of debt.
– African News Agency (ANA)