‘Edcon liquidation could wipe out almost 140 000 jobs’

THE CRISIS facing retail giant Edcon Holdings shows that the presidential Jobs Summit that was meant to cushion South Africa’s rising unemployment was a sham, the SA Federation of Trade Unions (Saftu) has said.

“Saftu is appalled at the prospect of the imminent liquidation of Edcon, which could lead to the loss of 140 000 jobs, 40 000 employed directly and 100 000 indirectly. It would be the single biggest loss of jobs in the country’s history. The country that already has the world’s sixth highest rate of unemployment could well move up to first place.

“With the impact on all those dependent on the workers’ income, it would mean over a million more South Africans being plunged into deep poverty. This collapse of Edcon reinforces Saftu’s view that the summit was a sham,’’ the trade union federation said in a statement.

Saftu boycotted the presidential Jobs Summit held in Johannesburg in October, saying it believed that the gathering by business, government, unions and NGOs would not do anything to reduce unemployment and create jobs.

Saftu says the crisis at Edcon will form part of its national shutdown in March next year over unemployment.

Edcon Holdings, which was once South Africa’s most profitable retailer, owns Edgars, Jet and CNA.

A report by the Sunday Times newspaper stated that Edcon had sent a letter to its 31 biggest landlords asking for a twoyear 41 percent “rent holiday” in exchange for a 5 percent stake in the business, in a bid to stave off liquidation.

Edcon Holdings has been struggling for the last few years to restructure its business in the face of the onslaught of cheap foreign imports and a move by consumers to e-commerce.

The group even launched Edgars Home in October in response to what customers had been saying about its product offering.

The group is also reportedly seeking R2 billion in emergency funding from its owners and the state-owned Public Investment Corporation to stave off its mountain of debt.

But Edcon chief executive Grant Pattison slammed the Sunday Times report as “irresponsible and sensationalist reporting”, saying that Edcon has been with this risk for some time and that the group was close to a deal to fix the business.

“Edcon is very close to announcing a complete recapitalisation of the business that should endure for the next few years. We cannot comment on the details, as it is not yet finalised. Speculation and sensationalism will harm, not help the company,” Pattison said in a statement.

“For the record, when Sunday Times asked us on comment late Friday, as they like to do, we said we can’t comment because the deal is not finalised. We ask them to wait a week so we could announce the signed deal. They refused.”

“Edcon comments that parts of the Sunday Times article 16 December 16, 2018, and specifically its headline, are unfortunately speculative, misleading and sensationalist. Edcon has not ‘crashed’. The group had a great sales day yesterday (December 15), with sales up on last year.”

Pattison also called on Edcon employees not to panic, saying that their jobs were safe.