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Brakish

Is this the end of the road for Edgars?

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Posted (edited)

Moneyweb is reporting that Edgars (and the rest of the Edcon group which still includes Jet as CNA was sold last month) may not open after the coronavirus lockdown period, which follows up on an article yesterday in fin24 in which the CEO made a call to suppliers telling them that the company only has sufficient liquidity to pay salaries but is "unable to honour any other accounts payable during this period".

If you remember Edgars was bailed out last year ostensibly to save jobs. But they have been kicking the can down the road for a while now. Is it time to take Edgars behind the barn and shoot it or can it be saved? And how should the saved entity look like? They can't continue like this.

Edited by Brakish

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Edgars has a very poor product mix, they should have changed their buyers (and buying policy) a decade ago and replaced them with people more in touch with modern trends. They also wasted a lot of bailout money revamping stores to be similar to the international brands (Zara, H&M etc.) which for a company in their position probably was not the best idea.

Rather those closing stores, Grant Pattison should have fired a quarter of the workforce as Edgars has too many staff standing around and doing nothing. But I guess then he would not have gotten the PIC bailout so close to elections.

Where to from here? Edgars is a private enterprise and should be allowed to go bankrupt like any other enterprise that can no longer compete in its industry. Unlike Eskom they have no strategic value, their only real value is their "footprint" and that consists of expensive mall rentals.

 


Specialist in failure.

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