Despite the pomp, Edcon’s strategy showcase fails to quell uncertainties
● It was all pomp and ceremony at Edcon’s strategy day this week as the retailer adopted a Walmart-type approach, with live performances and fashion shows to showcase its new strategy.
But just as the most recent shareholder meeting at Walmart, the world’s largest retailer, failed to ease concerns over the rise of Amazon and online shopping, it seems that the owner of Edgars also failed to quell uncertainties about its future strategies at its local event.
Over and above the noise of all things new, it was as though nothing much had changed.
Edcon announced its recommitment to the Edgars brand after confirming that it would rename some of its non-core stores.
Boardmans will become Edgars Home, Edgars Red Square will be Edgars Beauty, while Jet Mart will be absorbed into Jet and Edgars Active will be replaced by a new private-label youth brand.
Speaking on the sidelines of the event, group CEO Grant Pattison told Business Times that half of the Boardmans stores were at the end of their lease “so we said that we were not renewing about half of the stores’ leases. We are going to keep some of those stores and convert them into Edgars Home.”
Pattison said these would be standalone stores. “We will try not to have Edgars with an Edgars Home in it.”
Edcon will close 10 Boardmans stores, and in the first trial of conversion, it will open about six Edgars Home stores this year.
“While we are going to be closing stores, there’s no question we are going to be putting the same staff, those same fixtures, and that same offering into the new stores,” said Pattison.
He said they were looking at closing as many as 30 Jet Mart stores.
While there would be no direct change in these brands besides the name, Edcon would use the budgeted promotional brand-building money to focus on Edgars.
“We are trying to bring back the Edgars brand because people have said that we don’t know what it stands for,” he added.
For some time, industry pundits have said problems with Edcon’s business model centred on some of the group’s non-core assets, including CNA and Boardmans.
Edcon has spent about R350-million revamping and consolidating the new stores.
Pattison, who was the former CEO of Massmart, which was bought by Walmart in 2011, will have to do more than just change a few names to revive the business.
Pattison has been punted as a strategic thinker by industry peers, given his previous experiences at Massmart, and has been given the green light to shift the Edcon business, a move which some analysts are saying has been long overdue.
In the past five years, three Edcon CEOs have made some notable strategic blunders, but Pattison is expected to press the reset button.
When asked how a name change would fix Edcon’s problems, Pattison said it would bring “higher trading densities”.
“When you close the store, you lose the sales. We are trying to move the stores into smaller spaces and get the trading densities up. We are reinvesting in the Edgars brand, Jet and CNA,” he added.
Edcon’s new youth brand will also replace the Edgars Active stores.
During this year, Edcon has recommitted to opening five new rebranded Edgars Active stores and will open its next-generation Edgars store at the new Fourways Mall.
We are trying to bring back the Edgars brand