Retailability agrees to buy Edgars

EDCON Limited – the owners of clothing retailers Edgars – has agreed to sell the store to Retailability Pty Ltd – the holding company of stores such as Legit, Beaver Canoe and Style.

Retailability has at least 460 stores across South Africa, Namibia, Botswana, Lesotho, and eSwatini.

According to the announcement made by Edcon on Monday, the deal is still subject to various conditions and regulatory approvals, including by the competition authorities.

The signed, ‘Heads of Agreement’ only shows intent to buy and it is not yet a binding contract. It is mainly signed to outline the main issues relevant to a tentative sale. It only becomes enforceable when it is adopted into a contract and is subsequently agreed upon, unless otherwise stated.

Edcon said if approved, this transaction will ensure Retailability’s plans to utilise Edgars’ unique value proposition, and large attractive target market, to push for and ensure the growth and continuity of a proudly South African brand.

The need to sell Edgars comes after Edcon announced in late April that it would file for voluntary business rescue after the nationwide lockdown exacerbated its already dire financial position.

The terms of this potential sale have already been presented to stakeholders at various business rescue committee meetings, the company said.

“This significant step will not only save a significant number of jobs, but importantly, will lead to the sustainability of a proudly South African iconic brand, whose continuity would serve the greater economy. The details of the transaction will be finalised on the signing of definitive agreements and the fulfilment of the various conditions precedent,” the business rescue practitioners said.

The closing of the Edgars transaction is targeted for this quarter, the company said, and all stakeholders will be updated as the business rescue plan and the sales transactions progress.

“The business rescue plan in respect of the other Edcon businesses/or parts thereof is in its advanced stages. As you would anticipate, the nature of such transactions are complex, and formal announcements will be made once we are able to do so,” said the rescue team.

The sale, if it goes through, is expected to lead to similar ownership changes in Namibia as well.

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