Edcon Holdings has signed a purchase agreement that will see it sell parts of South African clothing chain Edgars to rival Retailability.
Retailability is a retail fashion holding company of retail brands including Legit, Beaver Canoe, and Style, operating in over 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.
“The signing of the Sale and Purchase Agreement is a positive step forward in meeting the objectives of the Edcon business rescue plan, which when successfully concluded, will result in the saving of a significant number of jobs and the continuation of a great iconic Edgars brand,” said the group’s Business Rescue Practitioners.
The closing of the transaction is targeted for September 2020 and is still subject to various conditions precedent and regulatory approvals, including the competition authorities.
The parties will now move to work on preparing the signing of the sale and purchase agreements for the Edgars business conducted in the rest of Africa.
Edcon was placed under business rescue 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 specialises in low-cost clothing – and Thank U, a finance and loyalty-card unit.
Earlier this month, The Foschini Group reached an agreement with Edcon to acquire some of Jet’s assets, while the Thank U accounts are still managed by microlender RCS, after acquiring the portfolio from Absa in 2019.
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.