South Africa’s troubled retailer, Edcon Group, has said that it would appoint Grant Pattison, the former Massmart boss, as its new chief executive next February in a vote of confidence for home grown talent.
South African-born Pattison has been tasked with implementing the group’s strategy, revitalising CNA, growing Edcon’s cellular business and growing the company in South Africa and the rest of the African continent.
Speaking to journalists at the company’s headquarters in Johannesburg yesterday, Pattison said he planned to step up to the challenge of restoring the Edcon’s image.
“The challenge of restoring Edcon to its former glory is both a privilege and a massive challenge,” he said.
Edcon has lost significant market share from local and international competitors, and was trying to claw back its diminishing customer base.
Pattison said he was not fazed by challenges in the retail sector.
“I am a professional chief executive and someone has to step and help the company through these times,” Pattison said.
Pattison, who is currently a non-executive director, will replace Bernie Brookes. Brookes will step down following a two-year tenure at Edcon.
Brookes, the former managing director of the Myer Group, is set to extend his contract, which was due to run until January next year.
To ensure a smooth transition, Pattison will be appointed as Edcon’s chief executive and chief operations officer designate on June 5, joining the executive management of the group and reporting to Brookes.
Brookes said that CNA had lost its path and the company would need to spend R100 million to revitalise the stores’ brand image.
“CNA fiddled in far too many categories. When you fiddle, you fail. We will take CNA back to its roots of being a stationery store. For example we were selling DVDs,” he said.
Brookes said that the company would eliminate the sale of items like toys at CNA.
“We will limit the sale of toys to peak periods like Christmas and Valentine’s Day,” he said.
Edcon is the largest clothing, footwear and general merchandise retailer in South Africa, completed by the sale of its Legit business for R637 million.
It operates more than 1400 stores with nine store formats and annual revenues of R25.2 billion.
The company said it had put the brakes on opening new stores and that there were 120 less stores this year compared with last year as part of the company’s plan to consolidate struggling operations.
“We have more space than any other retailer in South Africa. In some cases we have stores in the central business districts and we have stores in rural areas which are struggling because of the drought.
“We are planning to close struggling stores, and we will change labels in favour of more profitable ones,” he said.
Edcon, whose division includes Edgars, Boardmans, Red Square and mono-branded stores, has decided to exit international brands in favour of local brands.
By Dineo Faku for www.iol.co.za
Embattled Edcon company CNA has taken a new tack in a bid to generate revenue and keep customers coming through the doors by opening a Digital pop-up store on one of its larger premises in the Cresta Mall in Johannesburg.
A recent article by Hilton Tarrant for Moneyweb highlighted the plight of CNA:
CNA has become an awkward appendage, made more clear when one reads the Edcon financial statements. The group’s retail division is split into two segments: ‘Edgars’ and ‘Discount’. The latter is Jet and Legit, while the former is everything else, including the foreign brands it has launched in the country, like Topshop, River Island, and T.M. Lewin.
And then there’s CNA. Edcon CEO Jürgen Schreiber told Business Day that it’s considering the sale of “non-core stores”. There’s a lot of “non-core” in Edcon, including Boardmans and possibly Red Square, but surely CNA is first on that list?
Truth is CNA was never enough of a book shop to be a book shop. Or a toy store to be a toy store. Or a stationery outlet to be a stationery outlet. The only thing it was ever really good at was being a news agent. The huge variety of magazines available on its shelves was unmatched. But it’s 2015. Traditional news agents are either extinct or on the endangered list.
A foray into mobile phones and laptops seemed to be one bright light a few years back. But CNA never carried the breadth and depth of product to make it an obvious must-stop.
Perhaps CNA has revisited this idea with its new digital pop-up shops.
There’s JM Coetzee’s Disgrace depressing, and then there’s the CNA. You’d be hard-pressed to find a store that evokes starker feelings of gloom and desperation than Edcon’s centenarian stationery and bookshop chain.
Back in 1896 when it first opened its doors, a decade after Jo’burg was founded, CNA was probably on trend. It was WHSmith for the tip of Africa — all papers and periodicals, pots of ink and slide rules.
Today, it’s another story.
Spend five minutes in any of its 198 stores, amid its shemozzle of harsh strip-lighting, deeply impractical white floor tiles and rows of ring binders and packets of elastic bands, and you’ll reassess your life choices. Who, you wonder, is the market for their endless range of serial killer paperbacks and scrapbooking paper?
Customers clearly feel the same way, which is probably why CNA’s sales plunged 7.2% for its financial year to March, after falling 5.6% the year before.
It’s still making a profit, but the graph is only going one way.
Perhaps underplaying the problem, owners Edcon said tersely in a presentation last month that the business “requires new strategy and engineering”. The problem is, the modern CNA is an anachronism.
Bar an impressive stock of Mills & Boon (One Week With the French Tycoon, anyone?), there isn’t much you could need from CNA that you couldn’t find elsewhere.
There’s Exclusive Books for books, Incredible Connection for gadgets, Waltons for the boring stationery and Typo for the cool stationery.
And, most pertinently, there’s the Internet and takealot.com for all of the above.
Even in the 1990s, CNA was a relatively pleasing place to spend your money.
Its Formica shelves (very en vogue at the time) were lined with paper dolls and imported magazines, wrapping paper and the indisputable crack of newsagents — those collectable series that came out every fortnight.
Their “back to school” campaigns were a winner. The scramble to secure rolls of brown paper, exam pads and Space Cases, if you are my vintage, from your local store must be etched in the minds of generations of customers.
But 20 years on, nothing has changed. Today, those shelves seemed jaded. The stock is undercurated and underwhelming.
Edcon CEO Bernie Brookes, who aptly describes CNA as “broken”, has big plans to fix the company.
Quite how remains to be seen.
What’s clear is that in 2016, it’s going to take a whole lot more than sticky tape and overpriced get-well-soon cards to mend this damaged business.
By Sarah Buitendach for Financial Mail
Listed property group Attacq opens the R5-billion 130 000m² Mall of Africa on Thursday 28 April, hoping to serve an insatiable demand by South Africans for shopping centres.
The mall in Waterfall City, Midrand, offers an extensive array of tenants including many popular international and local brands, but no risks have been taken on unknown African brands. Being called “Mall of Africa”, one would expect an African or new South African brand to feature.
Shops opening in the mall include local staples like Woolworths, Checkers, CNA and Edgars.
The mall was developed by Attacq’s partner, the Atterbury Property Group, and careful planning went into selecting tenants, Cobus van Heerden of Atterbury Property Developments said.
The tenants chosen were considered to be the most commercially viable options, Van Heerden says.
“The aim of leasing was to create a tenant mix that prompted South African retailers to open flagship stores with top offerings, to entice as many as possible international retailers to participate, and to create a unique shopping experience to satisfy the expectations and spending power of the diverse customer base that will visit the mall,” he said.
“The tenant directory today reflects 159 top-class flagship South African national retailers, which make up about 92,684m² of the mall; and 105 international tenants, which account for approximately 30,330m²,” Mr van Heerden said.
The tenant list includes first-time openings for foreign brands French clothing chain The Kooples, the US’s Armani Exchange, Zara Home and outdoor sports group, Helly Hansen.
The mall will also have Coffee group Starbucks’s second store in SA, following the opening of its first branch in Rosebank last week.
Atterbury’s tenant mix is focused on providing entertainment and eating for a diverse customer base.
“Entertainment and eating has been well-covered with the broad spectrum of restaurants, Imax, and Prestige movie houses, ” Van Heerden says.
Other retailers include specialist make-up, accessory, and fashion stores, and a variety of home, sport and service stores, that “truly create a variety that would satisfy the most diverse taste and expectations”.
By locating different types of retailers in strategic positions in Mall of Africa, it meant no customer would frequent only a specific portion of the mall, Van Heerden says.
Meago Asset Management executive director Jay Padayatchi said the market was expecting the Mall of Africa’s tenant spread to be similar to other large higher-end malls.
“I suspect that the tenant spread wouldn’t be dramatically different from Rosebank Mall and Sandton City, except for the high-end tenants at Sandton City like Gucci, Ferragamo and Louis Vuitton,” he said.
One of the mall’s top-end tenants is Versace Collection.
By Alistair Anderson for www.bdlive.co.za