THE Foschini Group Limited, owners of Markhams, Exact, American Swiss and others, has offered Edcon Limited to buy at least 371 viable Jet stores and selected assets for N$480 million.
In an announcement made yesterday, the company said it has been granted exclusivity to negotiate and finalise the terms and conclude the proposed deal that would see it owning Jet in Namibia, Lesotho, South Africa and Eswathini.
In April Edcon, which owns Edgars and Jet, announced it would file for voluntary business rescue after the nationwide lockdown exacerbated its already dire financial position.
Edcon is currently selling off many of its core assets.
Last week it was reported that Retailability Pty Ltd – the holding company of stores such as Legit, Beaver Canoe and Style had already offered to buy Edgars to utilise its unique value proposition and large attractive target market to push for and ensure the growth and continuity of the brand.
The deal to buy Jet was presented to Edcon with conditions – that the stores will be sold with some key executives and staff, as well as stock the company would be holding, but must have a minimum value of N$800 million.
In the announcement, Foschini said this deal presents a unique opportunity which previously was not possible.
Other conditions to the sale include the acquisition of the Jet brand and all associated property, plant and equipment for the commercially viable stores, and the Durban distribution centre, as well as the rights to the Jet Club.
The company said it is also finalising the assessment of the capital requirements of the business and currently does not believe this would result in a significant change in the capital requirements for the overall group.
The deal is also subject to a customary conditions precedent for a transaction of this nature, including the renegotiation of store leases, requisite transitional service arrangements as well as approval by the relevant regulatory authorities.
In a trading update for April to June 2020, Foschini said consolidated retail turnover has declined by 43%, when compared to the same period last year.
This was mainly attributable to trading disruptions caused by government-enforced lockdowns and regulations in all three of their major operating territories – South Africa, the United Kingdom and Australia.
With the global economic environment constrained and consumers’ significant economic pressure, the company said it would continue to adapt its business to create long-term value for staff, customers and shareholders.
Pension funds, including the Government Institutions Pension Fund, have shares in the conglomerate, which operates in 32 countries around the world, with headquarters in South Africa.
The company last month said in light of the current subdued economic environment and the heightened levels of uncertainty, no final dividend would be declared this year.
Email: lazarus@namibian.com.na
Twitter: @Lasarus_A
