EDITORIAL: Edcon must smarten up after this rescue
Edcon must respond to competitors such as Mr Price, Zara, H&M and Cotton On, which have been eating its breakfast, lunch and dinner for years now
The R2.7bn bailout of the struggling Edcon Group is one in a growing list of lifeboats, some necessary and some not, offered to failed entities. Almost all of the corporate bailouts SA has had in the past 20 years or so have been preceded by the concentration of shareholder power and the trampling of corporate governance. Edcon, which operates Edgars, CNA and Jet, has not been immune to this. A failure of corporate governance often leads to operational and financial crises, as has been the case at the SABC, Eskom, PetroSA, SAA, Fidentia, African Bank, Auction Alliance and countless others in the roll of corporate failures. While many small privately owned entities have been allowed to fail, others such as African Bank have been bailed out because they carried systemic risk for their entire market. Edcon has been bailed out, this time by shopping mall landlords and the Unemployment Insurance Fund (UIF) through the Public Investment Corp (PIC). These stakeholders, together with the fa...
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