Edcon hampered by IT costs
Retailer Edcon, has bemoaned a 14.7% rise in “other operating costs”, primarily due to IT costs which contributed towards an overall loss of R1.012 billion in results from continuing operations in the 26 weeks ended September 2012.
Edcon, which houses brands including CNA, Edgars, Boardmans and Jet in its portfolio, reported a rise in total revenue during the period to R12.06 billion‚ from R11.77 billion a year earlier.
Edcon said that store costs increased by R75 million, or 6.9%, from R1.09 billion in the second quarter 2012, to R1.169 billion in the second quarter 2013. The primary drivers of this increase were rentals, electricity and water costs, as well as assessment rates.
For year to date 2013, store costs increased by R164 million, or 7.5% – from R2.188 billion in year to date 2012, to R2.35 billion.
Other operating costs increased by R108 million, or 14.7%, from R734 million in the second quarter 2012 to R842 million in the second quarter 2013.
“This significant increase is primarily as a result of IT costs relating to the modification of the debtors system for the sale of the receivables included in transitional costs as well as higher head office costs relating to divisional management,” Edcon said.
The retailer said it also invested R52 million in information systems infrastructure in the second quarter 2013, compared to R62 million in the second quarter 2012.
Earlier this month (November), Edcon concluded the first closing of an agreement with Absa for the sale of its private label store card portfolio, for R8.8 billion.
Earlier this year, Edcon opened its CNA chain to the online community through a revamped website which offers credit account purchases 24/7.
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