Johannesburg - The embattled Edcon group has appointed Bernard Brookes to take over the reins from Jürgen Schreiber, who declined, in May, to renew his contract.
Edcon says, in a statement to shareholders, that Brookes will step in as its CEO from the end of September. Brookes comes with extensive experience in retail sales at a time that Edcon needs serious leadership help.
Edcon chairman Dwight Poler notes: “We are very pleased to have Bernie joining the team. He has significant experience not only in apparel retailing in the southern hemisphere but also specifically department stores and emerging markets.”
The fashion retailer has been battling sluggish sales and a high debt level of around R25 billion. In its annual report, released earlier this month, it warned it may have to sell some assets.
“We may be required to sell assets or cease operations to improve our short-term liquidity and service our cash payments. Yet such asset sales may impair our ability to operate our business and compete effectively, which may depress the long-term value of our business. But such measures may be unsuccessful or only temporarily successful in improving our liquidity position,” the company said in its report.
The 86-year-old retailer also owes money to bondholders - and was recently downgraded - as well as controlling shareholder Bain, which bought the retailer out in 2007 at a time when it was profitable.
In the year to March, retail sales were up by 2 percent to R27.5bn. Yet although cash sales rose 11 percent, credit sales fell 8 percent with struggling consumers unwilling to spend money they do not have.
Edcon said previously it had explored measures to help it compete more effectively on credit, but these have yet to yield positive results.
In addition the retail market continues to be impacted by consumers under pressure in a tough economic environment.
Edcon’s new CEO spent the first 24 years of his career in Woolworths Australia, including two- to three-year projects in China, Hong Kong and India. He moved to Myer in 2006 as CEO where he was part of a buyout of the company’s department stores from Coles Myer valued at AUS$1.3 billion and led the company to a listing in November 2010 with a market value of more than AUS$2.3 billion, finally leaving Myer in May 2015.
Edcon adds he holds a Bachelor of Arts Diploma in Education (BA Dip Ed) from Macquarie University, Sydney and has a “strong philanthropic ethic serving both the industry and charitable endeavours through his involvement with the World Retail Congress, the Salvation Army of Australia and various institutions supporting cancer and other medical research”.
The company adds it has also appointed Urin Ferndale and Roanne Daniels as joint interim CEOs from August 16 until the day before Brookes joins the company.
Schreiber will remain on the board as vice chairman ensuring a smooth transition at “an important time for the company,” it says. He was appointed as CEO in April 2011.
Yesterday, Barclays Africa CEO Maria Ramos said the bank was part of a group of banks working together to support loss-making Edcon. Bloomberg quoted her as saying, if Edcon were to fail, the R8 billion Edcon store-card business it owns would become a collections book. Ramos said. Losses realised because of Edcon in the first six months weren’t “material”, she said.
IOL