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Struggling retailer Edcon has shut the doors of one its underperforming Edgars stores in Rosebank Mall as a cost cutting measure.
The closure of the Rosebank Edgards outlet – a store almost as big as a rugby field – follows last year’s closure of 150 other underperforming stores under the group, including various Jet, Edgars and CNA stores.
According to the group, the closure of these stores is largely in line with a cost reduction strategy to ensure profitability.
“The impact of this initiative is a reduction of our trading space, right sizing of our store portfolio, nodal store consolidation and repositioning of our key products.
“This involves the closure of some of our underperforming stores including Edgars Rosebank, with the lease for this store expiring on 30 September 2019,” said Mike Elliott, Chief Executive Edgars.
Last year, Edcon received a lifeline of R2.7bn from the Public Investment Corporation and lenders and rent reduction from landlords in return for equity to aid in restructuring its business model to restore competitiveness.
The group has faced a heavy debt burden amid an environment of weak consumer spending and slow economic growth. In 2016, Bain Capital Private Equity handed Edcon over to creditors after a 2007 buyout turned sour, Bloomberg reported.
Despite the store closures, Edcon said it had no plans to let go of its Rosebank Edgars employees, even in tough retail environment.
"As an organisation we are committed to saving jobs and we can confirm that all non-management employees in the Rosebank store have been accommodated and have opted to move to stores within the Edgars Division," said Elliot.
Edcon CEO Grant Pattison said the group does not plan on implementing any more cost cutting measures.
