Johannesburg - Edcon, South Africa’s largest clothing retailer, said second-quarter sales slipped as a fall in purchases using credit failed to offset a rise in those settled in cash.
Retail sales at the owner of the Edgars, Jet and CNA chains declined 0.1 percent in the three months through September 26 as transactions settled at a later date slumped 7.6 percent, the Johannesburg-based company said in a statement on Thursday.
Edcon’s net loss widened to R2.1 billion ($149 million) in the period, compared with a year-earlier loss of R627 million.
“The overall trading environment remains weak as economic growth forecasts were again revised downwards,” the company said. “The broader credit environment remains constrained and currency weakness and higher utility costs weigh on the consumer.”
Bain Capital Partners, based in Boston, bought Edcon for about R25 billion in 2007 to tap into rising economic growth in Africa’s second-largest economy. The deal burdened the retailer with debt, which increased 15 percent to R27 billion in the quarter. Bernard Brookes, who was head of Victoria, Australia-based Myer Holdings until May, became chief executive officer on September 30.
Inflation pressures are rising in South Africa at the same time as falling commodity prices and an electricity shortage weigh on the economy. The country’s retail sales fell 1.9 percent in September from a month earlier, according to the statistics office.
Edcon operated 1 527 outlets at the end of the period.
Cash sales, which account for almost 60 percent of the total, climbed 5.6 percent.
BLOOMBERG