Retail giant, Edcon, says reports that its stores are about to close are not true.
The closure of the stores would have resulted in thousands of employees losing their jobs.
A local newspaper article says the financially-troubled group is on the brink of collapse, putting the jobs of 140-thousand workers on the line. Edcon owns Edgars, Jet and CNA.
Edcon CEO Grant Pattison admits that the company has been experiencing financial difficulties for several years, but says plans are in place to stabilise the situation.
“There is an article out indicating that Edcon is about to close and cause job losses, this is incorrect. What we’re doing at the moment we’re just about to conclude a deal which will see the recapitalisation of Edcon.”
“Its financial problems are wildly reported and have been going on for several years. And we think we’re just about to reach a deal where we could see the company recapitalised and stabilised for the next few years.”
The company has reportedly approached shopping mall owners and government for aid in the form of rental discounts and investments.
The report further says Edcon is in need of a two-billion rand emergency funding from its owners, as well as state owned Public Investment Cooperation, PIC.
However, the CEO says they’re in the final stages of completing a deal to recapitalize Edcon and to restore it to its former glory, but did not reveal the details of the deal.
“The details of who is funding are not finalised yet and are subject to confidentiality. So I am not able to comment until the deal is finally finalised. We’ve been communicating for some time now that we need to raise extra cash for Edcon, we need about a billion rand in the next year and thereafter maybe another two-billion rand.”
Meanwhile trade union federation SAFTU says it would be a national disaster if 140-thousand Edcon workers were to lose their jobs.
SAFTU Spokesperson, Patrick Craven says: “It would make all the other pending job losses fade into insignificance and will have a huge effect on not just the individual, obviously, but on the economy as a whole. We believe that urgent action must be taken by the government. We cannot rely on the owners of the shopping malls or other business organisations to step in.”
However, Pattison has appealed to Edcon employees not to panic over reports he describes as speculation.
“My message would be firstly to thank them for the long hours and hard work over this Christmas period. And let them know don’t worry about speculation in the newspapers. When there’s something about the company that they need to know, I will communicate it to them directly. And for the moment we’re close to finalising a deal that should ensure the future of the company.”
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