Edcon was in financial distress well before Covid-19 changed the face of the South African economy. The owner of the Edgars and Jet chains filed for administration in April 2020 and the Business Rescue Plan (BRP) in respect of Edcon Limited was published late on Monday, 8 June 2020. With the myriad of stories surrounding the retail giant’s current position, Biznews reached out to the Executive of Internal Communication at Edcon. The following exchange occurred. – Nadya Swart
What do you envisage the business to look like with the implementation of the BRP?Â
As the Business Rescue Plan is currently in progress, this is unknown and therefore we are unable to share these details. However, we believe that all indications point to the Plan serving to rescue the Company by accepting and implementing the proposals of the Plan, and in so doing, will balance the interests of all stakeholders.
How many jobs are at stake?Â
The key priority and intention of the sales process is to secure the sale of the Business and/or its Divisions as a going concern which will result in the employment of those employees who are connected with the Business or Divisions that are sold being automatically transferred to the purchaser, in terms of section 197 of the LRA. This would result in a significant number of jobs being saved. Employees are protected by Section 197 of the LRA when the whole or part of a business is sold. Until we have received binding offers for the whole or part of a business we cannot comment on who will and won’t be transferred.
Will the Edgars and Jet brands still exist?
This is unknown at this stage. The sale of the business and/or the Divisions, include Edgars and Jet.
To what extent has Covid-19 had an impact on the decline of Edcon?
As we have stated in the April media release, Edcon was on track with its business plan to the end of December 2019. The advent of Covid-19 which resulted in the South African government announcing and implementing measures including a 45 day lockdown and social distancing period. This resulted in a further trading slump and the company immediately experiencing a loss of R2bn in sales. We expected and continue to expect sales to be depressed during the lockdown. In addition to this, there were restrictions on trading certain stock lines (in level 4).
