Cape Town – A socio-economic disaster will be unleashed on an unprecedented scale in the clothing, textile, footwear and leather sectors if a rescue funding crisis affecting financially struggling national clothing retailer Edcon is not resolved, according to the Southern African Clothing and Textile Workers Union (Sactwu).
“Sactwu is horrified that 140 000 jobs might be lost should the Edcon rescue funding crisis not be resolved within the next day (today).
‘‘Should this happen, it will unleash a socio-economic disaster, unprecedented in the recent history of the clothing, textile, footwear and leather sectors,” said Sactwu secretary-general Andre Kriel.
“The terrible multiplier effects on the poorest of the poor and the economy at large would be too ghastly to contemplate,” said Kriel.
Edcon, according to reports, is involved in talks with the Public Investment Corporation (PIC) for as much as R3 billion in funding assistance to save it from financial woes.
Edcon is South Africa’s biggest non-food retailer, while the PIC oversees state workers' pensions and is Africa’s largest asset fund manager.
Kriel said most workers in the clothing, textile, footwear and leather sectors were from some of the poorest parts of the country such as Atlantis, Caledon, Ladysmith, Isithebe, Newcastle, QwaQwa, Botshabelo, Babelegi, Fort Jackson, Zwelitsha, Despatch and Mogwase.
“All of them are black, and the majority are single mothers supporting, on average, at least five family members on their weekly wages,” said Kriel.
The PIC's head of corporate affairs, Deon Botha, said: “As previously indicated, the proposal (from Edcon) is being subjected to the PIC investment processes, after which a decision will be made.”
Kriel called on the Unemployment Insurance Fund (UIF) and PIC structures to fast-track approval of a priority rescue funding plan for Edcon. This should be done on an urgent basis, he said.
Edcon said: "Edcon is at its final stages with regard to all stakeholder engagements, and due to confidentiality agreements we are unable to share any specific details.
"As we have stated previously, we can confirm that we have had significant support from all stakeholders including landlords."