JOHANNESBURG – The crisis facing retail giant Edcon Holdings shows that the presidential Jobs Summit that was meant to cushion South Africa's rising unemployment was a sham, said the SA Federation of Trade Unions (Saftu).
''Saftu is appalled at the prospect of the imminent liquidation of Edcon, which could lead to the loss of 140 000 jobs, 40 000 employed directly and 100 000 indirectly. It would be the single biggest loss of jobs in the country’s history, the country that already has the world’s sixth highest rate of unemployment could well move up to first place.
"With the impact on all those dependent of the workers’ income, it would mean over a million more South Africans being plunged into deep poverty. This collapse of Edcon reinforces Saftu’s view that the summit was a sham,'' the trade union federation said in a statement.
Edcon Holdings, which was once South Africa's most profitable retailer, owns Edgars, Jet and CNA.
A report by the Sunday Times newspaper stated that Edcon had sent out a letter to its 31 biggest landlords asking for a two-year 41 percent "rent holiday" in exchange for a five percent stake in the business in a bid to stave off liquidation and the loss of up to 140 000 jobs. Edcon Holdings has been struggling for the last couple of years to restructure its business in the face of the cheap foreign imports onslaught and a move by consumers to e-commerce.
The group even launched Edgars Home in October in response to what customers had been saying about its product offering. The group is also reportedly seeking R2 billion in emergency funding from its owners and the state-owned Public Investment Corporation to stave off its mountain of debt.
But Edcon chief executive Grant Pattison slammed the Sunday Times report as "irresponsible and sensationalist reporting", saying that Edcon has been with this risk for some time and that the group was close to a deal to fix the business.
"Edcon is very close to announcing a complete recapitalisation of the business that should endure for the next few years. We cannot comment on the details as it is not yet finalised. Speculation and sensationalism will harm, not help the company," Pattison said in a statement.
Saftu boycotted the presidential Jobs Summit held in Johannesburg in October, saying it believed that the gathering by business, government, unions and NGOs would not do anything to reduce unemployment and create jobs.
Saftu says the crisis at Edcon will form part of its national shutdown in March next year over unemployment.
African News Agency (ANA)