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

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


Tension over who’s boss of courts

In a letter, Chief Justice Mogoeng Mogoeng questions whether Justice Minister Ronald Lamola has acted constitutionally

SABC sued over ‘bad’ clip of Ramaphosa

A senior employee at the public broadcaster wants compensation for claims of ‘sabotage’

Soundtrack to a pandemic: Africa’s best coronavirus songs

Drawing on lessons from Ebola, African artists are using music to convey public health messaging. And they are doing it in style

In East Africa, the locusts are coming back for more

In February the devastating locust swarms were the biggest seen in East Africa for 70 years. Now they’re even bigger

Press Releases

New energy mix on the cards

REI4P already has and will continue to yield thousands of employment opportunities

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders