JOHANNESBURG: South Africa’s largest non-food retailer Edcon, owner of the Edgars and Boardmans brands, said on Thursday it was in talks with lenders over a capital restructuring as sales continued to rise slowly amid wary consumer spending.
Edcon, with more than 1 500 stores across chains, reported group retail sales up by two percent to R27.5 billion in the year ended March 28. However, although cash sales rose 11 percent, credit sales fell 8 percent, with South Africans hesitant to spend money they didn’t have.
“Negative credit sales growth of 8 percent across all the divisions continues to delay meaningful growth of the business. While Edcon did explore measures to enable the company to compete more effectively on credit, these have yet to yield a positive outcome. In addition, the retail market continues to be impacted by a consumer under pressure in a tough economic environment,” it said in a statement.
Edcon, owned by US private equity firm Bain Capital Partners LLC, is reported to need to R4.7 billion of euro, dollar and rand debt next year. It said on Thursday that it had recently entered into discussions with bank lenders and certain 2019 bond holders over capital restructuring that could include debt refinancing.
