Edcon gets offer for parts of Edgars
Retailability, owner of Legit and Beaver Canoe and Style stores has made an offer for parts of Edgars, the business rescue practitioners announced on Tuesday.
Retailability bought Legit clothing stores from Edgars for R637m in 2016 and runs over 460 clothing stores across South Africa, Namibia, Botswana, Lesotho and Eswatini (Swaziland).
The Edcon business rescue practitioners said they had signed a “heads of agreement” to sell parts of Edgars to Retailability, but the sale “will be subject to various conditions precedent and regulatory approvals, including the competition authorities”.
Edcon, owner of Jet and Edgars, and employer of 17,200 staff, was placed in business rescue at the end of April after it could not pay suppliers following weak January sales and a loss of R2bn in trade when stores were closed during the Covid-19 lockdown.
Edcon owes secured and unsecured suppliers more than R8bn.
Business rescue practitioners Lance Schapiro and Piers Marsden did not say how many Edgars stores are being sold and which ones will be closed, nor did they disclose the value of the deal. The details of the transaction will be finalised on the signing of definitive agreements and fulfilment of conditions.
The pair said the sale of Edgars will “ensure the growth and continuity of a proudly South African Edgars brand,” and also save a “significant number” of jobs. The terms of the potential sale were presented to stakeholders at various business rescue committee meetings.
Schapiro and Marsden said they were unable to find a single buyer for all of Edgars. However, their press release suggested they were in “complex transactions” to sell other parts of the Edcon business that were at “advanced stages”.
The speed of the process is to ensure new owners of the clothing brands can order summer stock in good time.
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