Edcon losses rise as store remodeling disrupts sales

Edcon, the South African clothing retailer owned by Bain Capital Partners, posted higher first-quarter losses as store revamps disrupted operations and sales fell.

The company's net loss rose to R714-million in the three months to June compared with R214-million a year earlier, the Johannesburg-based company said today. Gross profit increased by 5.9% to R2.4-billion, while store costs rose by 7.3% to R1.3-billion.

Edcon, which owns chains including Edgars, Jet, CNA, Boardmans and Red Square, had 1 301 outlets at the end of the period, with the average retail space rising by 4.2%. South African retailers have reported weaker sales growth this year as rising unemployment and inflation put the brakes on consumer spending.

"In the Edgars division, the implementation of the second phase of the 72-store refurbishment programme is well under way,” Edcon said. "The heavy build element of this programme negatively affects results, but initial numbers from the first 16 stores completed during June are promising and the work is still on track."

The yield on Edcon’s €317-million of 9.5% bonds due in March 2018 had fallen by 10 basis points to 12.07% at 11.22am in Johannesburg.

Rising unemployment
Inflation rose to 6.3% in July, exceeding the 6% upper limit of the central bank’s target for the first time in 15 months as a weaker rand boosted fuel costs and electricity prices climbed.

After the introduction of Topshop Topman last year, Edcon has secured the franchise rights to TM Lewin, Dune London, Tom Tailor, Lucky Brand and Lipsy. These brands will be rolled out mainly through the shop-in-shop concept in Edgars.

Bain Capital, based in Boston, bought Edcon for about R25-billion in May 2007 to tap into rising economic growth in Africa’s largest economy. Revenue from operations outside South Africa now contribute 9.9% to total retail sales. – Bloomberg

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories


Already a subscriber? Sign in here


Latest stories

South African mines are getting safer, experts say, even though...

There has been a 14% decrease in deaths at mines this year compared to last year

Here comes the opera: Joburg Theatre presents Don Giovanni as...

Top international cast members to perform Mozart’s Don Giovanni with music by the Johannesburg Philharmonic Orchestra

Legal options running out for Julian Assange

Tug of war over the extradition of WikiLeaks founder to the US enters final stages, with London’s high court set to make a final decision in September

DRC: To restore security, address impunity for rights violations in...

Diplomatic and military action alone will not solve the problem of violence against civilians

press releases

Loading latest Press Releases…