Embattled retailer Edcon said today it had sent retrenchments notices to 22 000 of its staff, blaming power cuts, lack of binding offers to buy the business and COVID-19 as reasons.
Edcon, which owns brands such as Edgards and Jet, said it was in a dire financial position. The company is currently in business recue with Piers Marsden and Lance Shapiro overseeing the process to save the 90-year old company.
“The company’s financial position has recently become distressed due to the following;” “Poor sales, the recession in the South African economy exacerbated by frequent load-shedding disrupting purchasing patterns, and the advent of COVID-19 which resulted in the government implementing measures including the initial 45-day hard lockdown period which prohibited trading of non-essential products,” said Edcon.
Edcon was a successful retailer until US-based private equity firm Bain Capital got its hands on it in 2007, delisting Edcon from the JSE in a debt-financed R25 billion buyout.
Bain gave ownership of Edcon to creditors in 2016, in a debt-for-equity swap, that reduced Edcon’s debt burden to R6 billion from R26.7 billion.
