Edcon administrators sign sale of Edgars to Durban's Retailability

Credit: REUTERS/MIKE HUTCHINGS

JOHANNESBURG, Aug 24 (Reuters) - South African retail chain Edcon has signed an agreement to sell parts of its business to private equity-backed Retailability Ltd, administrators in charge of its restructuring said on Monday.

Edcon, which owns the 91-year old department store chain Edgars, entered into a form of bankruptcy protection in April after a coronavirus-led lockdown hurt the already struggling finances of the company.

"(The deal) not only indicates confidence in the Edgars business but augments Retailability's already blue-chip level of retail expertise," said Matuson Associates, administrators of the process.

As a next step in the process, the administrators and Retailability will start work on signing of the sale and purchase agreements for Edgar's rest of Africa business.

The transactions will close by September and will save a "significant" number of jobs, the administrators said.

Durban-based Retailability, which also runs the clothing outlets Beaver Canoe for men's fashion and Style for families, has 440 stores and some 2,000 employees in South Africa and neighbouring countries.

These are mainly located outside of big cities where the core of its low to middle income target market exists.

Edcon signed a deal with retailer TFG TFGJ.J this month sell select assets of budget clothing retailer Jet.

(Reporting by Promit Mukherjee; editing by Jason Neely)

((promit.mukherjee@thomsonreuters.com; +27 64833 4448;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.