Edcon: How to restore SA’s only remaining department store
Debt restructuring has bought the group time, but consolidation is also planned and the size of shops will be trimmed
Restoring Edcon, SA’s only remaining department store, to at least a semblance of its former glory is a daunting prospect. But former Massmart boss Grant Pattison believes it is possible. His challenge is to reverse the devastation of Edcon that followed its acquisition by US private equity firm Bain Capital for R25bn in 2007. From that year, when the retailer had a dominant 31% share of SA’s clothing and footwear market, it was downhill all the way. In typical private equity fashion Bain pumped debt into Edcon, pushing up its interest bill to R2.53bn in its year to March 2008 from virtually zero in previous years. The interest bill rose to R4.54bn in its year to March 2016, dwarfing its R987m trading profit. The investment firm ultimately walked away from Edcon in late 2016 with not a cent to show for its investment. Pattison shrugs off Edcon’s troubled past and says: "Despite outside scepticism, Edcon is now a very stable company." Pattison, who served as Massmart CEO between 2007...
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