Johannesburg - Edcon said fiscal third-quarter sales fell as it refurbished 72 stores and experienced stock delivery delays.
Sales for the 13 weeks through Dec. 29 are estimated at 8.3 billion rand ($929 million) to 8.38 billion rand, compared with 8.39 billion rand a year earlier, the Johannesburg-based company said in a statement. Same-store sales probably declined by 3.4 percent to 3.5 percent, the company said.
Photo: Leon Nicholas. Credit: Independent Newspapers
“The decrease in sales are due to the position of the discount division and disruptions of implementing our initiatives,” Chief Financial Officer Mark Bower said on a conference call.
Delays in stock delivery and lower mobile- phones sales resulted in same-store revenue declining 5.8 percent to 6 percent in the division, the company said.
Bain, based in Boston, bought Edcon in May 2007 for 25 billion rand in an effort to tap rising consumer spending in Africa’s biggest economy. Growth in South African retail sales slowed to an annual 3.4 percent in November after reaching a 12- month high of 8.6 percent in June.
The company, which owns the Top Shop brand in South Africa and had 1,218 stores at the end of 2012, has 25.3 billion rand in debt of which 13.8 billion rand will mature next year, according to data compiled by Bloomberg.
Edcon has secured a 4 billion-rand term loan with a group of local and international banks and will use the proceeds of selling 8.8 billion rand of its private label store cards to Barclays’ Absa to pay down debt, Chief Executive Officer Jurgen Schreiber said.
The yield on Edcon’s 317 million euros ($430 million) of notes due in March 2018 was unchanged at 9.49 percent. - Bloomberg