Sho­prite to take over store leases of El­ler­ines

Pro­posal a re­lief for land­lords and axed work­ers

The Star Early Edition - - COMPANIES - Re­nee Bonorchis and Jan­ice Kew

SHO­PRITE would take over the leases of some stores run by 45year-old fur­ni­ture re­tailer El­ler­ines, which is be­ing forced to close down, the re­tail­ing gi­ant said yes­ter­day.

El­ler­ines went bank­rupt in Au­gust after par­ent company African Bank In­vest­ments Limited failed. The ad­min­is­tra­tors now wind­ing down the op­er­a­tions, with more than 940 stores and 7 060 staff, have been un­able to sell four of El­ler­ines’s six main brands. In­stead they are in talks with two uniden­ti­fied South African re­tail­ers, with one of them pre­pared to take over leases on 210 stores and the other ne­go­ti­at­ing for 217 leases.

“We have al­ready taken some that they closed – Sho­prite has taken about 10 so far,” said Aubrey Karp, the man­ag­ing di­rec­tor of Sho­prite’s fur­ni­ture unit, said yes­ter­day.

Brothers Sid­ney and Eric El­ler­ines started the fur­ni­ture company in Jo­han­nes­burg in 1969 and it grew to be among the coun­try’s big­gest re­tail­ers.

African Bank, which bought El­ler­ines in 2008 to boost its lend­ing op­er­a­tions, loaned too much money to peo­ple who could not af­ford to pay it back and the lender col­lapsed in Au­gust as losses mounted.

El­ler­ines’s fund­ing was cut and ad­min­is­tra­tors stepped in to sal­vage some stores for cred­i­tors.

Sho­prite will lease fur­ther space “if this be­comes avail­able through the land­lords or even through El­ler­ines”, Karp said, with­out con­firm­ing whether his company is one of the two re­tail­ers pre­pared to take over more than 200 El­ler­ines stores.

“We will also look at all op­por­tu­ni­ties that arise.”

Sho­prite shares 1.42 per­cent up at R169.

Sho­prite said in April it planned to dou­ble its num­ber of

closed fur­ni­ture stores over the next decade as it iden­ti­fies new mar­kets away from ma­jor ur­ban cen­tres.

Many of El­ler­ines’s stores are in smaller towns such as Fochville in Gaut­eng, Hluh­luwe in KwaZulu-Natal and Kaka­mas in the North­ern Cape.

Hand­ing over the leases would mit­i­gate the dam­age for land­lords and pro­vide jobs for some El­ler­ines em­ploy­ees, said Les Ma­tu­son, one of the company’s ad­min­is­tra­tors, in an in­ter­view. – Bloomberg

PHOTO: TI­MOTHY BERNARD

Sho­prite’s shares rose after the re­tailer said it would take over the leases of some of the closed El­ler­ines’ shops.

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