Edcon Holdings Ltd. has agreed to sell part of South African clothing chain Edgars to a private equity-backed regional rival, potentially safeguarding a 91-year-old brand and saving thousands of jobs.
Administrators led by Lance Schapiro and Piers Marsden struck a deal with Retailability Pty Ltd., a holding company for brands Legit, Beaver Canoe and Style, which owns 460 stores across southern Africa. Details of the transaction will be finalised based on further agreements, the business-rescue team said in a statement on Tuesday.
“This is a good outcome for Edgars — if the deal goes through — because they might be able to save more jobs than expected,” said Lulama Qongqo, an analyst at Mergence Investment Managers in Cape Town. “Depending on the purchase price, lenders and real-estate investment trusts may be able to recoup some of the funds owed to them.”
Plans in place for the rescue are understood to be at an advanced stage for a company that employs almost 18,000 permanent workers and hires around 5,000 more on a seasonal basis.
