Rental deal gives Edcon critical breathing room
Retailer battling to save 40,000 direct jobs because of bad strategic decisions and competition
SA’s largest non-food retailer, Edcon, which is battling to save 40,000 direct jobs because of bad strategic decisions and mounting competition from newer retailers, has now managed to sign a rental savings deal with a fifth of its landlords. The saving on rent had given the company two years of breathing room as it restructured to become profitable and more relevant, having lost about 30% of its market share over a decade, CEO Grant Pattison said on Thursday. In a presentation given to a contingent of listed property fund managers and analysts at Eastgate mall on Thursday, where the group has one of its largest stores, Pattison said Edcon had approached 30 out of about 100 landlords from which it rents space. As many as 21 of those approached had agreed to reduce rent for two years for Edcon stores in exchange for stakes in the group. Other landlords had injected cash in exchange for equity. Landlords would effectively hold about 5% of Edcon. Pattison became group CEO in February 2...
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