Struggling clothing retailer Edcon is to file for a business rescue after losing R2bn in turnover during SA’s lockdown.
The group said its board passed a resolution authorising it to file for business rescue in the next few days.
Edcon, which owns the brands Jet and Edgars, said in a letter to suppliers that the R2 billion of lost sales during the COVID-19 crisis period which included the necessary “social distancing” measures, lockdown and extended lockdown, has consumed its remaining cash.
The retailer added that it will resume operations and open Edgars and Jet stores in “business rescue” mode on May 1.
“We thank you for your ongoing support and understanding and look forward to coming out of business rescue as a more financially secure and sustainable business, with long term trading prospects for all our stakeholders,” Grant Pattison, Edcon Group CEO, wrote in the letter.
Edcon’s troubles started in 2007 when it was bought by private equity company Bain for a then-record R25 billion.
Edcon’s business rescue is being implemented by Messrs. Piers Marsden and Lance Schapiro.