ZIMBABWE – South African retail giant, Edcon has completed the disposal of its shareholding in Zimbabwe-based clothing chain Edgars Stores Limited to Mauritius incorporated entity SSCG Africa Holdings, as the group realigns operations to remain sustainable.
Edcon controlled a 41 percent stake in Edgars Zimbabwe, which has 25 branches across the country as well as 25 Jet Stores, a micro-finance business and Carousel garment manufacturing factory in Bulawayo.
The transaction entails SSCG’s acquisition of a 100 percent shareholding in Bellfield Limited which is an investment vehicle owned by Edcon. The investment limited holds the 41 percent stake in Edgars Zimbabwe.
In a notice to its shareholders, Edgars indicated the completion of the transaction between Edcon and the Mauritian-based SSCG.
“The Company has received notice from SSCG Africa Holdings Limited that it has recently concluded a transaction in which it has acquired from Edcon Limited 127,138,510 shares (through Bellfield Limited) representing approximately 41,07 percent of the issued share capital of the Company,” said Edgars.
The Edgars transaction is not the first by SSCG Africa in Zimbabwe, as the firm also took a stake in resources group, Vast Resources with an US$8 million transaction- split into two with an equal amount for payment of shares and as a loan.
This comes after Edgars Stores reported 17 percent sales decline due to depressed government wages.
Suppressed consumer spending patterns triggered by depressed salaries being paid to potential customers, has led to Edgars Stores Limited’s units experiencing a 17 % sales decline in the year’s first half.
This was revealed by company’s chairperson, Thembikhosi Sibanda.
As a result of the situation, the clothing chain sold 0.6 million units, down from 0.8 million recorded during the same period last year.
However, the chain recorded a turnover of US$38 million, up from UA$19 million recorded during a comparative period last year.
“The business benefited from a leaner structure, cost inflation that was trailing top line inflation and pre-emptive stocking arrangements.” Said Sibanda.
The Jet Chain sold 0.87 million units as compared to 1.04 million units sold in the first half of 2018, registering a sales decrease of 17 % despite recording an increase in revenue of 91 %.