DURBAN - Troubled retail giant Edcon yesterday moved to consolidate its business into clothing, home decor and beauty operations, offloading its iconic CNA stores to Astoria Investments for an undisclosed amount.
Edcon said yesterday that it sold 167 books, stationery, magazines and gifting stores to the consortium as part of its strategy to focus on its core businesses.
The group, which was rescued by the Public Investment Corporation (PIC), lenders, tenants, and unions following a R2.7 billion lifeline last March, said that the sale was in line with its broader strategy shift from non-core operations. It said its focus was now on a fashion and beauty retail that provides credit.
Chief executive Grant Pattison said CNA was an important but not a strategic part of the Edcon business, as it was not focused on the clothing, beauty and home categories.
Pattison said the group would prime its efforts on Edgars, Jet and Thank U.
EDCON chief executive Grant Pattison says CNA is an important but not a strategic part of the Edcon business, as it was not focused on the clothing, beauty and home categories. timothy bernard African News Agency (ANA)
“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,” Pattison said.
The sale is, however, still subject to regulatory conditions.
Edcon has lost significant market share in a competitive retail environment.
In March last year, Edcon secured a R2.7bn deal with lenders, landlords and the PIC as part of its restructuring plan to save the group and about 140000 jobs. Edcon has been battling to restore its balance sheet, weighed down by a heavy debt burden which led to the group adopting a turnaround strategy and a new recapitalisation plan.
The strategy included the Johannesburg-based retailer clawing back the market it has lost to competitors following the onslaught of international brands by focusing on private labels.
Last month, Edcon shut the doors of one of its underperforming Edgars stores in the Rosebank Mall as a cost-cutting measure.
The closure of the Rosebank Edgars outlet - a store almost as big as a rugby field - follows last year’s closure of 150 other under-performing stores under the group, including various Jet, Edgars and CNA stores.
Pattison said the new owners had the muscle and extensive management focus and leadership expertise to invest in the business.
He said the sale would not result in any job losses.
Astoria Investments, which has a primary listing on the Stock Exchange of Mauritius and the Alternative Exchange of the JSE, said it wanted to focus CNA on the original building blocks of its founders, with books, stationery, magazines and gifting at its core.
“We believe that this transaction will be welcomed by staff, landlords and suppliers, including publishers, both locally and internationally,” Astoria Investments said.
“The outlets will be community-focused, supporting and encouraging reading while catering for the entire stationery needs of consumers throughout South Africa.”