Struggling clothing retailer Edcon Holdings which owns Edgars Stores has decided to close its doors in the trendy Rosebank Mall owned by JSE-listed Hyprop Investments.
The retailer has been in trouble for some time, suffering slowing consumer demand in recent years as have other businesses amid the struggling SA economy. Also not helping Edcon has been its massive debt.
The closure of the 5,971m² store — equivalent to about 70% of the size of a large rugby field — is one of the first Edgars outlets to shut its doors in a high-end mall.
This follows last year’s closure of 150 other underperforming stores under the group, including various Jet, Edgards and CNA stores.
“Our strategy is to have Edgars stores in the regional malls and in community malls,” Edcon CEO Grant Pattison said in statement.
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,” said Mike Elliott, Chief Executive Edgars.
Last year, Edcon reached a refinancing deal with its lenders, landlords and the Public Investment Corporation (PIC), securing over R2.7 billion rand.
A number of landlords including Redefine Properties, Growthpoint Properties, Vukile Property Fund, Liberty Two Degrees met with Edcon Group and agreed to reduce rent in exchange for a stake in the business in a bid to stave off liquidation and save jobs. Edcon employs about 30,000 people.
Landlords would have missed the Edcon shops, which are regarded as anchor tenants that serve as magnets for shoppers.
With other South African retail staples like Stuttafords disappearing from malls, it is unsurprising that big landlords were keen to do a deal to keep occupancy levels up.
Source: SA Commercial Property News http://www.sacommercialpropnews.co.za/property-companies-news/9150-edgars-store-vacates-from-upmarket-rosebank-mall.html