Troubled Edcon group serves retrenchment notice to 22 000 employees

Troubled Edcon group serves retrenchment notice to 22 000 employees

- 22 000 Edcon employees have received retrenchment notices

- The troubled group, which owns Edgars and Jet, served the retrenchment notices in efforts to avoid being liquidated

- The group went into business rescue earlier this year but has also been affected by the lockdown

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South Africa's biggest non-food retailer, Edcon, has served 22 000 employees with notices of retrenchments as it blames load-shedding and the initial 45-day lockdown for its collapse.

Edcon Holdings, which owns Edgars, Jet, CNA and others, is now seeking buyers to stay afloat due to debt and poor sales.

The group, which has been battling for over a decade, served 22 000 workers with retrenchment notices as the 90-year old company tries to avoid being liquidated.

Troubled Edcon group serves retrenchment notice to 22 000 employees

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An employee who has worked for the Edcon group for 10 years blamed their struggles on the company's decision to shift focus onto its financial services, which brought "easy millions of rands".

The employee, who wished to remain anonymous, said:

"Edcon's core business is selling clothes but we found ourselves with shortages of stock in many of our stores, especially smaller ones, because we lost focus and this was bound to affect our sales in general."

Another employee said she had already updated her CV and is looking for another job. She said:

"I'm very scared, I'm in fear because I don't really understand what's really happening but it's clear that our jobs are on the line."

In March, Edcon announced that it was officially under business rescue, adding that it had lost R2 billion in sales since early March and was unable to pay its suppliers for both March and April month-ends.

The retrenchment notice, dated 10 June and addressed to all employees and labour union South African Commercial, Catering and Allied Workers Union (SACCAWU), stated the company's 2019 restructuring plan. This includes sourcing R2.7 billion from among others the Public Investment Corporation (PIC), which had been on track until the end of December 2019.

SACCAWU's Secretariat Coordinator Lucas Ramatlhodi said the union felt the decision to put Edcon under business rescue was "very premature".

Ramathlodi added that:

"The company had received a cash injection in a form of a bailout [from the PIC] in the very recent past, we still haven't received a feedback in terms of how the bailout had assisted in terms of turning the company around."

He added that they have raised these concerns with Trade, Industry & Competition Minister Ebrahim Patel.

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Source: Briefly.co.za

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