SA’s Edcon sells CNA stores
The new owners of CNA want the outlets to focus on the community.
The Edcon Group, holding company chains like Edgars and Jet, intends selling 167 of its CNA stores, the struggling South African retailer said yesterday.
Subject to customary conditions precedent such as regulatory approvals, the stores will be sold to a consortium, majority owned by JSE listed Astoria Investments Ltd, and led by Jan van Niekerk, Edcon said in a statement yesterday.
Astoria operates from Mauritius and has small stakes in firms including Admiral Group Alphabet Inc, Johnson & Johnson and Home Depot. The company is dual-listed on the Overall Index of the Namibian Stock Exchange (NSX). It has a total market capitalisation of N$363 million and closed at N$2.95 per share on Tuesday.
Edcon is not dual-listed on the NSX.
Edcon said the transaction is aligned to Edcon’s broader strategy which is to focus on its core business through the realignment of its retail brands and operations. It includes all brands and trademarks, with the business continuing to trade under the CNA brand name.
Edcon CEO Grant Pattison explained: “Edcon has a simple business model that is focused on delivering an enhanced customer experience, and an optimised store portfolio, ultimately creating a focus on our three divisions: Edgars, Jet, and Thank U.”
‘Financial abyss’
“The ongoing process of consolidating, merging and rebranding of the businesses, will ensure an offering of a selected set of private and some international brands, while also being a fashion and beauty retailer that provides credit,” Pattison said.
Fin24 yesterday reported that Edcon has been staring into a financial abyss for the past couple of years. It has billions in debt, which have snowballed since American investment firm Bain Capital bought it in 2007.
Last year, the group was saved from collapse by securing a R2.7 billion lifeline - a deal struck with landlords, the Public Investment Corporation, and creditors.
The loss-making Boardmans and Red Square chains have since been shut, and a number of prominent stores – including the Edgars in Rosebank mall, and various CNA outlets – have been closed.
Edcon’s turnaround plan also entails closing non-performing stores, reducing store space, rebranding Edgars' beauty stores and merging its home stores with Edgars, Reuters reported.
‘Muscle’
In Edcon’s statement, Pattison continued: “As I have always said, CNA is an important but not a strategic part of the Edcon business, as it is not focused on clothing, beauty and home categories, and we would only sell if it’s good for CNA. The new owners have the muscle and extensive management focus and leadership expertise to invest in the business. I am also pleased that this transaction will not result in any job losses.”
According to the statement, the new owners intend to focus CNA on the original building blocks of its founders, with books, stationery, magazines and gifting at its core. The outlets will be community-focused: supporting and encouraging reading while catering for the entire stationery needs of consumers throughout South Africa.
“We believe that this transaction will be welcomed by staff, landlords and suppliers including publishers, both locally and internationally” said Astoria Investments. – Own report, Nampa/Reuters and Fin24
Subject to customary conditions precedent such as regulatory approvals, the stores will be sold to a consortium, majority owned by JSE listed Astoria Investments Ltd, and led by Jan van Niekerk, Edcon said in a statement yesterday.
Astoria operates from Mauritius and has small stakes in firms including Admiral Group Alphabet Inc, Johnson & Johnson and Home Depot. The company is dual-listed on the Overall Index of the Namibian Stock Exchange (NSX). It has a total market capitalisation of N$363 million and closed at N$2.95 per share on Tuesday.
Edcon is not dual-listed on the NSX.
Edcon said the transaction is aligned to Edcon’s broader strategy which is to focus on its core business through the realignment of its retail brands and operations. It includes all brands and trademarks, with the business continuing to trade under the CNA brand name.
Edcon CEO Grant Pattison explained: “Edcon has a simple business model that is focused on delivering an enhanced customer experience, and an optimised store portfolio, ultimately creating a focus on our three divisions: Edgars, Jet, and Thank U.”
‘Financial abyss’
“The ongoing process of consolidating, merging and rebranding of the businesses, will ensure an offering of a selected set of private and some international brands, while also being a fashion and beauty retailer that provides credit,” Pattison said.
Fin24 yesterday reported that Edcon has been staring into a financial abyss for the past couple of years. It has billions in debt, which have snowballed since American investment firm Bain Capital bought it in 2007.
Last year, the group was saved from collapse by securing a R2.7 billion lifeline - a deal struck with landlords, the Public Investment Corporation, and creditors.
The loss-making Boardmans and Red Square chains have since been shut, and a number of prominent stores – including the Edgars in Rosebank mall, and various CNA outlets – have been closed.
Edcon’s turnaround plan also entails closing non-performing stores, reducing store space, rebranding Edgars' beauty stores and merging its home stores with Edgars, Reuters reported.
‘Muscle’
In Edcon’s statement, Pattison continued: “As I have always said, CNA is an important but not a strategic part of the Edcon business, as it is not focused on clothing, beauty and home categories, and we would only sell if it’s good for CNA. The new owners have the muscle and extensive management focus and leadership expertise to invest in the business. I am also pleased that this transaction will not result in any job losses.”
According to the statement, the new owners intend to focus CNA on the original building blocks of its founders, with books, stationery, magazines and gifting at its core. The outlets will be community-focused: supporting and encouraging reading while catering for the entire stationery needs of consumers throughout South Africa.
“We believe that this transaction will be welcomed by staff, landlords and suppliers including publishers, both locally and internationally” said Astoria Investments. – Own report, Nampa/Reuters and Fin24
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