By Lauren Hartzenberg for BizCommunity
A rebrand is on the cards for CNA and Edgars stores as part of Edcon’s turnaround strategy to win back shoppers, reported Business Day on Friday.
CNA and Edgars stores to sport new lookFormer Massmart CEO Grant Pattison replaced Bernie Brookes as Edcon chief executive at the start of this year, and has since been focusing on reconfiguring the retail group’s offerings.
While Edgars and Jet had continued to trade positively in ladieswear and footwear according to its latest quarterly performance report, overall Edcon reported a 9.4% drop in retail sales for the third quarter while total group revenues decreased 8% to R8.2bn owing to a decrease in retail sales of R795m compared with the prior period.
The departmental store retailer has been battling to maintain market share in South Africa’s increasingly competitive retail environment, with European retailers like H&M entering the local market and expanding its footprint at a rapid rate.
Despite challenges, Pattinson has stated that the company is recommitting to the departmental store model, explaining that the model “offers convenience”.
Edgars is in the process of a logo facelift, which would complement the new store layouts and the roll-out of its next-generation stores, CEO Mike Elliott told Business Day.
CNA will also be undergoing a rebrand and would be consolidating its focus on stationery, educational materials and arts and craft. “A new store layout would ensure customers could do self-service,” said CNA’s general manager, Julie Day.
According to an article published in the Sunday Times at the weekend, former Exclusive Books CEO Benjamin Trisk is willing to re-engineer Edcon’s flailing CNA brand.
This follows his recent departure from the book retailer after a breakdown with the company’s shareholders. Hired in 2013, he spent the past five years in charge of a turn-around strategy after the store had experienced a series of failures.
Trisk told Business Times this week that he would only consider joining CNA if approached. “I would probably look at it very seriously. However, I must make it clear that I have not been approached.”
“But I’m not leaping into anything. I’ve had one approach from overseas which I can’t talk about at the moment. Locally I’ve also had approaches, but I think it’s quite early in the cycle,” he said.
CNA: Edcon’s white elephant
CNA has long been in the doldrums. In 1997, Wooltru bought CNA out of CNA-Gallo for R447-million.
A turnaround plan was implemented but failed dismally and in 2001, the company was sold to Gordon Kay & Associates for R192-million. By the following year, CNA was in liquidation.
Edcon, under the leadership of US retailer Steve Ross, snapped up CNA for R141-million, but 16 years later the retail brand continues to make losses.
CNA is part of Edcon’s speciality division, that once housed Legit, Edgars Shoe Gallery and the group’s non-profitable brands.
According to The Sunday Times, Chris Gilmour, an investment analyst, said: “They tried hard, but couldn’t win. They [Edcon] are thinking about getting out anyway, they can’t keep on putting more money into it. [CNA] is a pile of unadulterated rubbish that should have died 20 years ago.”
Gilmour said South Africa didn’t have a high-street retail culture anymore, making it difficult for brands such as CNA to have a market “and as a result the model is completely shot”.
Meanwhile, Alec Abraham, a senior equity analyst at Sasfin Wealth, told The Sunday Times: “I don’t know what they [CNA] are and I don’t know if they know what they are.”
He said there was a likelihood that CNA would end up in a similar situation to that of Musica, where “they can’t find a buyer because no one wants to buy this unfit business and they are running with the idea as long as they are not losing money on it. And if they are going to be the last man standing, then so be it.”
An Edcon spokesperson has confirmed that CNA is not for sale.
According to Edcon’s latest financial results, for the 13 weeks to December 23 last year, CNA has 196 stores, including 11 Samsung stores, positioning its offering in electronics, stationery, gaming and the limited book retail offering.
Original article by Palesa Vuyolwethu Tshandu for The Sunday Times
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