Edgars Consolidated Stores, one of South Africa’s largest retailers, says it has no response to Thursday’s call by the Congress of South African Trade Unions (Cosatu) for investors to disinvest from Edcon shares.
“We can’t comment on what drives fund managers’ investment decisions,” said Edcon’s executive manager for investor relations Tessa Christelis on Friday.
“But we hope that any decision they make over what they buy or sell is not based on what someone tells them to do.”
The union’s move is the latest attempt to get retailers to pledge to source at least 75% of their goods from South Africa, a pledge that has been unanimously rejected more than once by retailers including Edcon, Foschini, Truworths, Pick ‘n Pay, Mr Price and Woolworths.
The two parties are now at an impasse, as although retailers say they want to continue discussions with unions, manufacturers and the government over issues threatening the textile and clothing industry’s future, unions have rejected further talks in favour of stiffer measures, according to Christelis.
She believed Cosatu has targeted Edcon because of the advertisement it had recently placed in several newspapers outlining the retailers’ reasons for refusing to sign the pledge.
On Thursday, Cosatu’s central executive committee said it would “seek to ensure that no workers’ money be invested in Edcon”.
The leadership said it would approach Old Mutual and other trustees of retirement funds to withdraw investments from the listed retail group.
“Our collective retirement funds will no longer be used by companies like Edcon that seem determined to destroy workers’ futures,” Cosatu said.
Christelis pointed out that, thanks to robust growth in the retail sector over the past five years, Edcon and other retailers were now buying “probably double” in terms of rand value and number of units from the local industry than five years ago. Job losses in the textile and clothing industry have largely been caused by lost export orders arising from the strong rand.
“It’s far more sensationalist to target local retailers than international retailers who have cancelled their orders,” she noted.
“The top five South African retailers are responsible for about 65% of all formal sector clothing sales, and only about 25% of imports from China, so why aren’t they targeting the other 75% of imports?” – I-Net Bridge