Ed­con off­loads 167-store CNA

SOLD: CON­SOR­TIUM LED BY AS­TO­RIA BUYS IT

The Citizen (KZN) - - Business - Suren Naidoo Money­web

This move is aligned to Ed­con’s broader strat­egy of fo­cus­ing on its core cloth­ing-based busi­ness.

Un­listed re­tail group Ed­con will off­load its 167-store sta­tionery chain CNA to a con­sor­tium led by JSE-listed As­to­ria In­vest­ments for an undis­closed amount.

The deal, which is sub­ject to nor­mal reg­u­la­tory ap­provals, was an­nounced by Ed­con yes­ter­day. It comes as the group con­tin­ues its re­struc­tur­ing to turn the busi­ness around af­ter se­cur­ing a R2.7 bil­lion re­cap­i­tal­i­sa­tion life­line in March last year from the Pub­lic In­vest­ment Cor­po­ra­tion, ex­ist­ing len­ders and sev­eral of its land­lords.

Ed­con, which also owns re­tail chains Edgars and Jet, said that the sale to the As­to­ria-led

con­sor­tium is aligned to Ed­con’s broader strat­egy to fo­cus on its core busi­ness. This in­cludes the re­align­ment of its re­tail brands and op­er­a­tions.

It said the trans­ac­tion in­cludes all brands and trade­marks un­der the CNA busi­ness, which would mean the busi­ness would con­tinue to trade un­der the CNA brand.

The sale of CNA does not come as a sur­prise as sev­eral re­tail an­a­lysts have mooted Ed­con sell­ing the sta­tionery chain as it did not fit in with the re­tail group’s largely cloth­ing-fo­cused busi­ness. Calls for Ed­con to dis­pose of its CNA unit were made again last year when the cash-strapped group se­cured the R2.7 bil­lion re­cap­i­tal­i­sa­tion life­line.

Com­ment­ing on the deal, Ed­con CEO Grant Pat­ti­son said as part of a sim­pler busi­ness model the group is op­ti­mis­ing its store port­fo­lio to fo­cus on its three di­vi­sions: Edgars, Jet, and its Thank U cus­tomer loy­alty and fi­nan­cial ser­vices divi­sion. “The on­go­ing process of con­sol­i­dat­ing, merg­ing and re­brand­ing of the busi­nesses will en­sure an of­fer­ing of a se­lected set of pri­vate and some in­ter­na­tional brands, while also be­ing a fash­ion and beauty re­tailer that pro­vides credit,” he said.

Bloomberg

OFF THE BOOKS. An­a­lysts pre­dicted that Ed­con would not hold onto CNA as it re­struc­tures its busi­nesses.Pic­ture:

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