Boss of Edgars, Jet, and CNA denies report of ‘collapse’ that could close 1,300 stores

Edcon CEO Grant Pattison on Sunday denied allegations that the retail group is close to liquidation, which could see up to 1,300 stores close.

This was after the Sunday Times reported that Edcon – the owner of households South African brands such as Edgars, CNA, and Jet – is likely to enter into liquidation if an offer to landlords is rejected.

That would mean the loss of some 40,000 direct and 100,000 indirect jobs.

The deal asks landlords for a two-year “rent holiday” in exchange for shares in the company.

In a series of tweets, Pattison said Edcon is close to announcing a recapitalisation deal which will ensure its survival and “restore it to its former glory.”

He condemned the Sunday Times for “misleading and sensationalist” reporting.

“Rather than report that the stakeholders of Edcon on working on a deal, close to completion, to keep Edcon going and restore it to its former glory, the Sunday Times continues its campaign to damage the company,” Pattison tweeted.

“Some people seem to relish the potential job losses. I just don’t get it.”

He said Edcon cannot comment on the details of the deal until its finalised.

“Speculation and sensationalism will harm not help the company.”

Edcon has been in South Africa for over 90 years and has suffered from slowing consumer demand and escalating debt – which stood at R24.7 billion at the end of 2016.

Its sales fell by 9.4% between October and December 2017, and adjusted earnings before interest, taxes, depreciation and amortisation slumped to 25%.

2018 sales have, however, already improved, Pattison said on Sunday.

His restructuring plan calls for Edcon to focus on Edgars, retaining discount retailer Jet and CNA.

The Boardman’s chain of homeware stores would, however, be closed.

Pattison is a former CEO of Massmart Holdings, best known for selling a majority stake in the company to Wal-Mart Stores in 2011.

 

Article sourced from Business Insider