Edcon has announced that the sale of parts of the Edgars business in South Africa to Retailability (Pty) Ltd has been implemented, with all approvals from regulatory authorities and all conditions precedent either fulfilled or waived.
The sale includes the transfer of approximately 120 stores in South Africa together with the businesses conducted therein.
Retailability, a fashion retailer and a holding company of store brands including Legit, Beaver Canoe and Style, operates in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.
Retailability aims to ensure that ongoing operational business is its top priority, while integration work is moving ahead vigorously.
“We are pleased that we were able to close the transaction within two (2) months after the announcement. The closure of the transaction underlines the industry fit and the excellent compatibility between Edgars and Retailability’s strategic intent, infrastructure, and value chain. We are pleased by the significant saving of approximately 5,200 jobs as well as the continued commitment to the retail industry, economy, and the sustainability of the South African Edgars brand,” said business rescue practitioners.
The finalisation of the sale in South Africa indicates the achievement of a critical milestone in the Edcon business rescue plan. The parties will continue to co-operate and work towards concluding the sale of Edgars’ businesses in other various jurisdictions in Africa (namely Botswana, eSwatini, Lesotho and Namibia), where various regulatory approvals and conditions precedent remain
By Philippa Larkin for IOL
Taxi financer Transaction Capital has announced that it has concluded a subscription deal to buy a 49.9% stake in automotive retailer WeBuyCars, for R1.84billion.
The group said that WeBuyCars would continue to operate as an independent business within its specialised market, adjacent to SA Taxi, with this investment establishing Transaction Capital’s third market vertical. It said the investment had no integration risk for it.
WeBuyCars is currently owned 60% by the family trusts of founders Faan and Dirk van der Walt, 31.5% by Fledge Capital Proprietary and 8.5% by minority shareholders.
Transaction said it would pay R1.47bn in cash and R16467000 on newly issued ordinary shares at R20 per share for an aggregate value of R329.3million.
It said favourable trends amplified by Covid-19 were likely to accelerate growth in the used vehicle segment.
Chief executive David Hurwitz said: “This investment is an exceptional opportunity to own a significant interest in a trader of used vehicles in South Africa. The investment in WeBuyCars will be immediately value accretive, converting interest income on our undeployed capital into higher yielding operating earnings, accelerating Transaction Capital’s earnings growth rate. Options are in place, which if exercised and implemented, after regulatory approval, would result in Transaction Capital increasing its interest in WeBuyCars at a future date.”
The Competition Commission earlier this year scuppered Naspers’s deal to buy WeBuyCars over fears that it could have led to a substantial reduction in competition in the car-buying market.
Transaction Capital said that WeBuyCars was uniquely positioned in its market segment, highly competitive and entrepreneurial founder-led business, with an impressive 20-year track record.
Hurwitz said he expected Transaction Capital to return to strong organic earnings and dividend growth above 2019 pre-Covid-19 levels for the 2021 financial year and beyond. Transaction Capital declined 0.38% on the JSE yesterday to close at R18.20.
The Foschini Group says it has concluded a sale agreement with Edcon for some of the stores and assets of Jet.
The Foschini Group (TFG) has reached an agreement with Edcon’s business rescue practitioners to buy some of its subsidiary Jet’s assets. The fashion retailer first announced over a month ago that it had made a R480 million offer to buy some 371 “commercially viable” Jet stores.
Edcon, which owns Edgars and Jet Stores, filed for voluntary business rescue in April after the nationwide lockdown exacerbated its already dire financial position. In June, its BRPs said the only way to save the company was through an “accelerated sale” of its divisions.
“TFG is pleased to announce that it has successfully negotiated and concluded a sale of assets agreement with Edcon and its Business Rescue Practitioners on 14 August 2020 and on principally the same terms as those set out in the conditional offer,” wrote the company in an announcement published on the Stock Exchange News Service on Monday.
TFG’s conditional offer provided for TFG to acquire the Jet brand, a minimum of 371 stores including a distribution centre located in Durban, as well as certain stores in Botswana, Lesotho, Namibia and Eswatini.
The offer also included the acquisition of at least R800 million worth of stock and property and equipment.
TFG said the sale of asset agreements in Botswana, Namibia, Lesotho and eSwatini stores has not yet been finalised, but is expected to be executed shortly. To conclude the acquisition, TFG is waiting on approval from competition authorities, amended lease terms from landlords, and confirmation from unsecured credit provider, RCS Cards, that it will continue providing credit for Jet customers.
“Based on the positive progress to date, the parties believe that the remaining conditions precedent could be fulfilled by the end of September 2020,” said the company.
Source: Algoa FM
The owners of the South African fast-food franchise Domino’s Pizza have moved to auction off the contents of their stores throughout the country.
Owner JSE-listed Taste Holdings announced late in 2019 that it would be exiting the food business (Starbucks, Domino’s Pizza, Maxi’s and The Fish & Chip Co.) and shifting its focus to luxury goods.
The decision to auction off the franchise was made after Taste Holdings failed to acquire an investor for the ailing business.
Park Village Auctions (PVA) is the company responsible for the upcoming auction of Domino’s Pizza.
Offers to purchase the contents of the franchise have opened as of Tuesday, July 21, and will end on August 5 at 12 noon.
The auction includes the contents of 50 fully fitted stores as well as food preparation factories, all of which are located throughout the nine provinces of South Africa.
However, the auction will not be held in a conventional way; rather, bidders will make their offers online. The joint provisional liquidators of Taste Holdings will then review the bids and declare the winning bidder.
According to Andrew Dix-Peek of Park Village Auctions (PVA), all the contents of each pizza outlet are to be sold complete or in a combination of lots.
The three preparation factories that are located in Gauteng and Western Cape provinces are also to be sold in lots or in set combinations.
“The stores – fully equipped – stand ready to trade, allowing an investor to ‘hit the ground running’ in the current economic climate where food for delivery or collection currently reigns over sit-down meals,” said Dix-Peek in a statement on Tuesday.
According to a recent BusinessLive article, CEO of CNA, Benjamin Trisk, “only expects a recovery for the stationery business when back-to-school shopping starts in 2021”.
Edcon bought CNA for R141-million in 2002; it sold it for R1 to Astoria Investments in February.
Due to the Covid-19 pandemic and the five-week nationwide lockdown, consumer spend is under pressure on the back of a weak economy and a rise in retrenchments.
Growing digital platforms are selling competing products, often at better prices.
Trisk believes an improvement in CNA sales would come when consumers returned to shops. Foot traffic at the larger malls remains down, though some mall owners say while shopping fewer times a month, customers are buying more each time.
Trisk has reiterated his plans to revive CNA by:
- Improving the retailer’s book selection and adding more local African literature and books in local languages
- Improving the signage, curation and display in-store
- Cutting CNA product lines
- Removing chocolates, snacks, and tech products including laptops, cellphones and chargers
By Londiwe Buthelezi for Fin24
The Foschini Group (TFG) says it has submitted a conditional offer to acquire Edcon’s business rescue practitioners to acquire some of the stores and assets of JET.
In the offer submitted on Friday, TFG offered Edcon R480-million to acquire a minimum of 371 commercially viable JET stores.
Edcon, which owns Edgars and Jet Stores, announced in late April that it would file for voluntary business rescue after the nationwide lockdown exacerbated its already dire financial position. In June, its BRPs said the only way to save the company and the jobs of its thousands of its employees was through an “accelerated sale” of its divisions to interested parties.
TFG, which has been growing its local manufacturing capacity, said the proposed deal also comes with JET’s distribution centre located in Durban and certain stores in Botswana, Lesotho, Namibia and Eswatini. The company is looking to also acquire JET Club and all existing JET stock of no less than R800-million.
“Edcon’s business rescue practitioners have accepted the terms of TFG’s conditional offer. TFG has been granted exclusivity to negotiate and finalise the terms and conclude the Proposed Transaction,” wrote the fashion retailer in a statement issued on Monday morning.
Analysts have long speculated that JET will probably be one division of Edcon that buyers will find interesting.
The BRPs announced last Tuesday they had signed an agreement to sell parts of Edgars to Retailability, another fashion retailer that owns the brands Legit, Beaver Canoe and Style.
TFG said JET’s brand recognition and market share and would provide it with a strategically important expansion into the “value segment” of the Southern African retail apparel market.
“The proposed transaction enables TFG to acquire selected parts of the JET business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price,” wrote TFG.
By Promit Mukherjee for Reuters
Parts of South African retail chain Edcon are likely to be sold to private equity-backed Retailability, administrators in charge of its restructuring said.
Best known as owner of the 91-year-old department store chain Edgars and budget clothing retailer Jet, Edcon is one of South Africa’s oldest retail groups but applied for a form of bankruptcy protection in April.
“Retailability plans to utilise Edgars’ unique value proposition, and large attractive target market, to ensure the growth and continuity,” Edcon’s administrators said in the statement, which was issued on Monday.
Edcon entered a process called business rescue in South Africa after it failed to generate enough revenues as a coronavirus lockdown shut its stores across the country. Less than half the 199 stores that fall under the Edgars stable are deemed viable, say business rescue practitioners.
Its administrators said a transaction with Retailability would save a “significant” number of jobs.
Piers Marsden and Lance Schapiro of Matuson Associates, administrators of the process, said last month that they had identified 15 parties interested in picking up all or parts of debt-laden Edcon.
The statement did not say what Retailability would pay and which parts of Edcon the Durban-based retail chain, which bought Edcon’s young women’s fashion division, Legit, in 2016 for 637 million rand ($37.29 million), would buy.
Matuson Associates and Retailability did not immediately respond to an email seeking comment.
Retailability, which runs two other clothing outlets, Beaver Canoe for men’s fashion and Style for families, has 440 stores and some 2,000 employees in South Africa and neighbouring countries.
These are mainly located outside of big cities where the core if its low to middle income target market exists.
By Londiwe Buthelezi for Fin24
The business rescue practitioners for Edcon say the only way to save the company and the livelihoods of its thousands of employees is through “accelerated sales” of the clothing retailer’s divisions to interested parties.
Edcon, which owns Edgars and Jet Stores, announced on April 29 that it would file for voluntary business rescue after the nationwide lockdown exacerbated its already dire financial position, causing the group to lose about R2 billion in sales when it was not allowed to trade.
Now the BPRs have delivered a rescue plan for the retailer, published on Edcon’s website on Tuesday morning. According to the plan – an “accelerated sales process” of divisions that can be sold and a winding down of those they may fail to sell would be in the best interests of all stakeholders. The BRPs said this proposal was a product of consultations with Edcon’s creditors, landlords, employees representatives and trade union, Saccawu.
No parties have shown interest in investing in or providing funding to Edcon, said the company.
Mr Price has rejected speculation that it has been looking to acquire retail chain Jet, a unit of struggling fashion giant, Edcon, which recently went into business rescue.
“The Group has no intention to acquire Edcon, in part or in whole,” the Durban-based retailer said in a statement on SENS last week.
However, a recent Business Day article stated that Edcon has attracted 15 entities interested in buying one or both of its two divisions.
The sale of Edcon’s businesses as a going concern would allow the company to transfer some of the employees to new owners, resulting in a significant number of jobs being saved.
“If the sale is implemented, the BPRs will seek to obtain the sale of the business or its divisions as going concerns, thereby resulting in the transfer of the relevant employees and many jobs being preserved. Employees who are retrenched, if any would be in a better position than in a liquidation,” wrote the BRPs in the business plan.
They added in a statement published by Edcon on Tuesday that creditors and landlords would also be in a better position if Edcon entities continued trading.
According to the BRPs, a significant number of parties have already expressed interest in the sales process. Initially, the BRPs received interest from 19 parties who were keen to participate in the accelerated sale process, they said. Fifteen of these complied with the requirements to proceed as preferred bidders. They are required to submit their final offers to by the end of June 2020 and finalising of successful bids will happen by early July 2020.
Divisions that aren’t sold in that process could be auctioned or sold in private treaty sales, among other means. The BRPs said Edcon employees continued to receive their salaries in April and May and they expected to make such payments again at the end of June.
The embattled Edcon Group has announced the sale of CNA to a consortium of investors led by JSE-listed Astoria Investments.
The buyout is led by Jan van Niekerk, who heads asset manager RECM and Calibre (RAC) together with Piet Viljoen. RAC took control of Mauritius-based Astoria last year.
The appointed team leader is Benjamin Trisk, who was the CEO of Exclusive Books.
All of the 167 CNA stores, along with the brand, will be sold as part of the transaction, which still needs to be approved by the authorities.
The transaction value was not disclosed, but the sale includes CNA staff, stock, fittings and leases. Trade creditors and other debt will remain with Edcon.
Edcon CEO Grant Pattison explains: “Edcon has a simple business model that is focused on delivering an enhanced customer experience, and an optimised store portfolio, ultimately creating a focus on our three divisions: Edgars, Jet, and Thank U.
“As I have always said, CNA is an important but not a strategic part of the Edcon business, as it is not focused on clothing, beauty and home categories, and we would only sell if it’s good for CNA.
“The new owners have the muscle and extensive management focus and leadership expertise to invest in the business. I am also pleased that this transaction will not result in any job losses.”
According to a statement, the Astoria consortium intends to focus CNA on books, stationery, magazines and gifting. It will signal a move away from technology items such as phones and laptops.
“We believe that this transaction will be welcomed by staff, landlords and suppliers including publishers, both locally and internationally,” said Astoria Investments.
“The ongoing process of consolidating, merging and rebranding of the businesses, will ensure an offering of a selected set of private and some international brands, while also being a fashion and beauty retailer that provides credit.”
Edcon has been staring into a financial abyss for the past few years. It has billions in debt, which has snowballed since American investment firm Bain Capital bought it in 2007.
Last year, the group was saved from collapse by securing a R2.7-billion lifeline – a deal struck with landlords, the Public Investment Corporation, and creditors.
The loss-making Boardmans and Red Square chains have since been shut, and a number of prominent stores – including the Edgars in Rosebank mall, and various CNA outlets – have been closed.
Source: Telecom Paper
MTN South Africa employees have expressed fears the company’s move to sell off its stores will result in them losing their jobs, a report form ITWeb has revealed.
Already, an employee representative, who opted to remain anonymous, contacted ITWeb alleging the mobile operator was looking to sell off its stores and in the process “dupe them into joblessness without proper consultations” with the workers at these facilities.
MTN denied the retrenchment accusation but confirmed there are plans to sell stores. Employees will be transferred to new employers at their current total cost to company packages, for a minimum period of twelve months.
Jacqui O’Sullivan, executive for corporate affairs at MTN said the company’s objective with this project is not to close stores, but to grow the company’s store footprint and BBBEE ownership of MTN stores.
The plan will see MTN increasing its number of stores in the coming two years, creating businesses for new owners and job opportunities for new store employees.