Edcon group which owns the famed Edgars and Jet stores has announced that it is planning to file for voluntary business rescue to continue operating.
In a statement issued on Wednesday (29 April 2020), the group said it has lost R2bn in sales since the coronavirus outbreak and the ordered lockdown.
Edcon’s stores (Edgars and Jet will open on the 1st of May 2020, under level 4 regulations.
“The sales miss, and the decline in collections of the debtor’s book has meant that Edcon is unable to pay its suppliers for both the March and April month-ends. Paying April salaries will require assistance from the UIF Covid-19 TERS program”, said the group.
Edcon also anticipates that the sales will be depressed for some time during the “Covid-19 Risk Adjusted Strategy” phase, which may last several months.
Per statement:
- “The R2.7bn (circa R230m of which was still due to be received to March 2021) cash provided to Edcon in the last restructuring has been substantially utilized funding the losses for the financial years ending March 2019, and March 2020, as planned. Edcon was on track with its business plan to the end of December 2019”.
- “The R2bn of lost sales during the Covid-19 crisis period which included the necessary “social distancing” measures, lockdown and extended lockdown, has consumed the Group’s remaining cash”.
- “Edcon’s stores will open on the 1st May, but we will have do so under “Business Rescue”.
- “We will be working closely with the appointed Business Rescue Practitioners, shareholders, and government to find a way to plug the financial hole”.
