Johannesburg - Edcon Holdings plans to cut jobs at its Johannesburg head office as South Africa’s largest clothing retailer seeks to revive sales and earnings.
While it’s too early to say how many positions will be lost, it will be fewer than the 2 000 reported on Monday by Johannesburg-based Business Report, Edcon spokeswoman Vuyo Mtawa said by phone. The company employs about 3 000 at its central office.
The move is designed to “reflect a simpler, more agile structure that positions us for growth,” the company said in an e-mailed response to questions. The process will be completed “around March” and employees of the company owned by US private-equity firm Bain Capital Partners will have the opportunity to apply for other positions, Mtawa said.
Edcon has struggled since its R25 billion ($1.6 billion) purchase by Boston-based Bain in 2007 ladened the retailer with debt, while its flagship fashion chain Edgars has suffered declining market share.
CEO Bernie Brookes said December 9 that Edcon’s executive team was reduced to nine from 17 while more head-office jobs would be eliminated in February and March.
The retailer announced on November 30 that it had agreed with lenders to a debt refinancing that will see it reduce borrowings by R4.5 billion, easing the pressure on its balance sheet and enabling the company to pursue the turnaround plan.
Edcon is also seeing an improvement in credit sales after starting its own so-called second-look credit book in October 2014. This borrowing platform, which considers customers that failed to meet lending criteria stipulated by primary lender Barclays Africa Group, stands at about R200 million. The retailer’s loan approvals halved after Edcon sold its private-label store cards business to Barclays’ Africa unit in 2012.
This reduction of head office staff comes a year after another round of job losses.
BLOOMBERG