Foschini buys Jet; booze ban will kill jobs – employers; Ghana glitters for FirstRand; Tesla

By Jackie Cameron

  • The Foschini Group is to buy Jet stores from Edcon for about R500m. Jet owner Edcon, which also owns 91-year-old department store chain Edgars, applied for bankruptcy protection in April. The proposed deal includes acquisition of the Jet brand, a minimum of 371 commercially viable stores, a distribution centre in Durban and certain stores in Botswana, Lesotho, Namibia and eSwatini, says Reuters. TFG will also buy the Jet Club membership programme and all existing stock holdings with a minimum stock value of no less than R800 million, it said. The company also reported retail turnover down 43% for the three months to June 27, citing the impact of coronavirus lockdowns in South Africa, the UK and Australia.
  • Employers warn that South Africa’s reinstated ban on alcohol sales will hit businesses hard and lead to further job losses. The ANC is using Covid-19 as its ‘tool for radical economic transformation’, says Gerhard Papenfus, CE of the National Employers Association of South Africa. Papenfus asks why taxis are allowed to be filled to full capacity? “The answer is that it is done for purposes of political expediency. Taxi owners, for purpose of economic survival, have already indicated that they will simply defy government if it dared to regulate and enforce another arrangement,” he says in a hard-hitting statement. “Economic survival, however, applies to all sectors and all individuals. Liquor stores were, from 8pm last night, not allowed to open. Everybody involved in these enterprises, in fact the whole of the liquor supply chain (entrepreneurs and workers) will, as from today, be out of business, out of work and out of pay. Unlike during the previous three months, there will be no UIF assistance for workers. The illegal liquor trade, as is the case with cigarettes, will boom,” says Papenfus.
  • The FirstRand Group has spotted potentially lucrative opportunities in Ghana. It plans to replicate its South African business, where it is a leader in car and home finance, in Ghana following the takeover of the West African nation’s biggest mortgage provider, says Bloomberg. First National Bank Ghana will also expand GHL Bank’s offerings to include insurance, personal loans and investment products, said Dominic Adu, the chief executive officer of the combined entity. “Until the deal in May, FirstRand was mainly focused on corporate and investment banking after getting a license to operate in Ghana in 2014. FirstRand, Africa’s biggest bank by market value, builds its strategy around offering its customers as many services as possible, from within the group, to boost revenue and protect profit margins,” says Bloomberg. The purchase by the Johannesburg-based lender of GHL gives it a foothold in an economy that’s been expanding by more than 6.8% for the past three years, it notes. The government forecasts gross domestic product will grow 1.2% this year even as the coronavirus pandemic causes many other economies, including South Africa’s, to shrink, adds the news agency.
  • Tesla stock jumped about 16% on Monday, the biggest intraday gain since March 24, reports Bloomberg. The incredible rally in the stock has left Wall Street analysts struggling to make sense of the sky-high valuation — which soared past that of Toyota Motors earlier this month and topped $300 billion on Monday. Tesla shares are up about four-fold just this year, despite a steep pandemic-related selloff in February and March, says the news service. “Although the stock had kicked off this year with a strong run, its ascent has been turbo-charged after Tesla reported better-than-expected delivery numbers for the second quarter earlier this month, leading many to say the company may be poised to report a profit for the period. Profitability is good news in itself, but in the case of Tesla, this would also mark the fourth consecutive quarter of profit, a milestone it needs to achieve to be considered for inclusion in the S&P 500 Index.” The self-made kid from Pretoria is now the seventh richest person in the world, and possibly even wealthier than that, worth an official $70bn.