South African-based retail company Edcon Holdings agreed to sell part of its stake in Edgars a clothing chain to a private-equity backed regional rival. This move is forecast to safeguard the 91-year-old brand and potentially saving thousands of jobs.
The move to sell part of embattled Edgars to Retailability was Administered by Lance Schapiro and Piers Marsden.
Retailability Pty Ltd is a holding company for various clothing brands such as Legit, Beaver Canoe and Style. The retail company owns over 450 stores and outlets in South Africa, Namibia Botswana, Lesotho and eSwatini.
The specifics of the transaction will be concluded based on the signing of additional agreements, the business-rescue team said in a statement on Tuesday.
Edcon which has been struggling was put into a local form of bankruptcy in first quarter of 2020 after measures to contain the coronavirus disease lead to a stringent lockdown in South Africa. The lockdown had an adverse effect on the sales of the company and further drop sales down.
“This significant step will not only save a significant number of jobs, but importantly, will lead to the sustainability of a proud South African iconic brand, whose continuity would serve the greater economy. The details of the transaction will be finalized on the signing of definitive agreements and the fulfilment of the various conditions precedent”, the Administrators said.
The company as a whole employs almost 18,000 permanent workers and hires about 5,000 more on a seasonal basis.