EDITORIAL: Edcon has its work cut out after bailout
Thousands of jobs will be saved, but major structural challenges remain
It’s the season of bailouts, with retailer Edcon becoming the latest to get a handout, to the tune of R2.7bn, from existing lenders, the Public Investment Corporation (PIC), the Unemployment Insurance Fund (UIF) and landlords. CEO Grant Pattison, who joined in June 2017, believes it is a “significant step forward” to get the company back on “the path to success”, and that it will provide the management with enough time to implement its store restructuring plans. In the process, thousands of jobs will be saved — not only of the employees and casual workers at its Edgars, Jet and CNA shops —but also in the clothing manufacturing sector. With 44% of its products made locally, Edcon is the biggest supporter of local manufacturers, according to the SA Clothing and Textile Workers’ Union. The management is happy, the unions are happy, and the landlords are pretending to be happy.
But we’ve seen this movie before. In late 2016, then CEO Bernie Brookes announced an enormous debt-to-eq...
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