Edcon Holdings agreed to sell part of South African clothing chain Edgars to a private-equity backed regional rival, safeguarding a 91-year-old brand and potentially 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, that owns 460 stores across southern Africa.
Details of the transaction will be finalized based on the signing of further agreements, the business-rescue team said in a statement on Tuesday.
Edcon was put into a local form of bankruptcy protection in late April, after a five-week strict lockdown to contain the coronavirus in South Africa wiped out sales and curtailed a recovery from a 2019 restructuring.
Edgars was put up for sale alongside sister chains Jet, which specializes in low-cost clothing, and Thank U, a finance and loyalty-card unit.
Rescue plans for the other parts of Edcon are at an advanced stage, the administrators said. The company as a whole employs almost 18,000 permanent workers and hires about 5,000 more on a seasonal basis.
Retailability, based in Durban, has backers including Johannesburg-based Metier Private Equity. The company bought the fashion chain Legit from Edcon four years ago.