By Dineo Faku for IOL
Edcon, South Africa’s biggest retailer, which filed for voluntary business rescue in April, has signed a sale and purchase agreement to sell parts of its biggest brand, Edgars, to Durban’s Retailability.
Edcon’s business rescue practitioner’s (BRPs) said yesterday that the group was close to sealing the transaction that would augment Retailability’s already blue-chip level of retail expertise.
“The signing of the sale and purchase agreement is a positive step forward in meeting the objectives of the Edcon business rescue plan, which when successfully concluded will result in the saving of a significant number of jobs and the continuation of a great and iconic Edgars brand,” said the BRPs.
The BRPs expected the transaction to close next month and said that it was still subject to various conditions precedent and regulatory approvals, including the competition authorities.
“The parties will now move to work on preparing the signing of the Sale and Purchase Agreements for the Edgars business conducted in the rest of Africa,” said the BRPs.
Retailability is a South African-based retail fashion group whose brands include Legit, Beaver Canoe, and Style. It operates in more than 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.
Last week Edcon’s BRPs concluded the sale of asset agreement with The Foschini Group (TFG) for some of the group’s Jet assets. TFG, owner of 29 brands including Foschini and Sterns, first unveiled its plan to acquire 371 Jet stores for R480 million in July.
TFG also acquired a distribution centre located in Durban, and certain stores in Botswana, Lesotho, Namibia and eSwatini. TFG said in July that the transaction of the acquisition of Jet stores was a unique opportunity which previously was not possible at an attractive price.
The Edcon board passed a resolution authorising the company to file for business rescue after losing R2 billion shortly after the declaration of a national emergency post the Covid-19 pandemic outbreak.
In June, Edcon’s BRPs proposed the sale of Edcon’s Edgars, Jet and its loyalty programme Thank U after an interest to invest in or provide funding to the company was not forthcoming, and the securing of post-commencement finance not currently imminent.
“The key priority and intention of the sales process are to secure the sale of the business, and/or its divisions as going concerns, which most notably will involve the transfer of some of the employees, resulting in a significant number of jobs being saved at Edcon,” they said at the time.
Both the employee and South African Commercial, Catering and Allied Workers Union representatives expressed support for the business rescue plan, indicating that it would ensure the preservation of jobs, ensuring future business continuity and ultimate support for the South African economy. The representatives indicated that liquidation was not an option.