Bain’s Edcon Plans Job Cuts as Clothing Retailer Seeks ProfitJanice Kew
Edcon Holdings Pty Ltd. plans to cut jobs as South Africa’s biggest non-food retailer seeks a return to profit.
“Edcon confirms that it has initiated a process to eliminate operational inefficiencies. This process may result in a reduction of headcount within Edcon’s head office,” a company spokesperson said in an e-mailed response to questions on Monday. “While we cannot confirm numbers as yet, Edcon has commenced the process of consultation with all the affected employees. Any possible job losses are regrettable and Edcon’s immediate focus is on supporting employees.”
The process includes the streamlining of roles and responsibilities, the consolidation of certain functions, the elimination of duplications and the leveraging of technological opportunities.
Owned by U.S. private equity firm Bain Capital Partners LLC since 2007, Edcon is struggling with rising interest costs and waning financing opportunities as high inflation and unemployment of more than 25 percent hurt consumer spending. The Johannesburg-based owner of the Edgars and Jet chains said in November that it lost 1.1 billion rand ($95 million) in the six months through Sept. 27. The company employs more than 20,000 permanent staff, according to its website.
Moody’s Investors Service on Jan. 21 cut Edcon’s global-scale corporate family rating to Caa1 from B3, citing concerns over Edcon’s ability to manage its debt amid a weak operating environment in South Africa. Edcon owes almost 2 billion rand this year, according to data compiled by Bloomberg. The company plans to release third-quarter earnings on Feb. 20.
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