Edcon loss narrows as renovated stores attract shoppers
Edcon Holdings, South Africa’s largest clothing retailer, said its first-quarter loss narrowed as more shoppers visited revamped stores.
The net-loss was R499-million in the three months through June compared with a year-earlier loss of R712-million, the Johannesburg-based company said in a statement on Thursday. Gross profit rose 1.9% to R2.5-billion, while store costs rose 13% to R1.5-billion as the company completed a 72-outlet refurbishment program.
“Edcon believes the base for change has now been built, and is satisfied that total performance has stabilised,” the company said. “Despite a tougher economic environment, growth opportunities are evident,” and “customers are responding positively to the changes made across all our store formats.”
The company’s chains, including Edgars, Jet, CNA, Boardmans and Red Square, operated 1 430 outlets at the end of the period, with average retail space rising 5.1%.
South African retailers have reported weaker sales growth this year as rising unemployment and inflation discourage consumer spending.
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 accounted for 11% of retail sales in the quarter, up from 9.9% a year earlier.– Bloomberg