EDCON

Edcon is nie die eerste besigheidsgroep wat hul deure moes sluit (as en wanneer dit gaan gebeur) nie en dit gaan ook nie die laaste een wees nie.   Daar word heelwat deure nou toegemaak en meestal as gevolg van kompetisie met China of koopkrag.  Dit kan bevraagteken word hoeveel invloed die Chinese in Suid-Afrika en die res van Afrika het, nie net in die tekstiel en klerebedryf nie, maar elke ander “straat” en selfs “naam” sal nou anders uitgelê word.    
How many other groups of companies and organisations closed their doors since 1994?  Mostly there are reasons for.  Black economic empowerment is in the front row, with reason, like Eskom.   Edcon will not be the first or the last one to close their doors.

edcon board.PNG

BACKGROUND INFORMATION

 

EDCON
 
2005
The majority of the clothing goods purchased by Edgars Consolidated Stores (Edcon) were locally manufactured, group chief executive Steve Ross said yesterday after the speciality retailer’s annual general meeting (AGM).
“Over 50 percent of our purchases are locally manufactured and this was equivalent to about R6.5 billion in financial 2005, which is 20 percent more than in financial 2004,” said Ross.
 
He added that 470 million garments had been imported from China in the year to April but that the four top clothing retailers, namely Edcon, Pick ‘n Pay, Truworths and Foschini, had purchased only 25 percent of these imports.
This 25 percent figure compares with the 65 percent share of the clothing market that the four retailers are deemed to control, according to official statistics.
 
Ross said there were over 2 000 independent Chinese retailers that operated predominantly in small towns in South Africa.
 
He said these retailers and the informal retailers accounted for much of the imports from China.
 
On the implications of the loss of jobs in the textile and clothing manufacturing sector as a result of these imports, he said Edcon had created an additional 2 650 jobs during financial 2005. About 40 percent of these new jobs were casual.
 
At a general meeting held immediately afterwards, the AGM shareholders approved the resolutions necessary to implement the 10-for-1 share split and the staff black economic empowerment (BEE) deal.
 
About 17 000 of the group’s 18 000 employees will benefit from the empowerment transaction, which will see about 10.6 percent of Edcon’s equity allocated to an empowerment trust.
 
Edcon also released a trading update yesterday for the first quarter of its financial year, which showed that sales rose by 25 percent compared with the same period the previous year.
 
The better-than-expected performance saw the share price jump by R10.85 to a record high of R307.85. The general retailers sector rose 1.53 percent.
 
Although all the stores showed good growth, the Jet clothing chain stood out with sales growth of 31 percent, in an environment where selling prices were 23 percent lower than the previous year.
 
After taking into account the 6 percent growth in average retail space, this brought the like-for-like growth in the volume of units sold to 48 percent.
 
Analysts said Jet’s performance benefited from very competitive pricing, which had led to an improved value perception, increased social grants and real wage increases.
 
The group said that earnings for the first three months were in line with budget and that the earnings guide for the full year, which was given in May and forecast to grow in excess of sales growth, remained appropriate.
 
*
 
2006 news
The country’s six largest clothing retailers, Edcon, Truworths, Woolworths, Foschini, Pepkor and Mr Price today said that further concerns have emerged as they compile the necessary information in response to the government’s proposed imposition of quotas on Chinese clothing imports.
 
*
 
Clotrade and retailers who are signatories to this statement believe the gazetted plan with respect to quotas from China will result in chaos and enormous disruption for the industry.
 
 
**
CHINESE IN AFRICA – 2009 –
by South African Institute of International Affairs (SAIIA)
Local retailers see profits dwindle and have been driven out of business, unable to compete with Chinese retailers.However, policy changes in China have also resulted in ‘a heterogeneous migration
flow to different parts of the world…(wherein most) migrants concerned do not enter
the established wage labour market in existing communities… but set up their own
business, most commonly retail or wholesale of Chinese goods, Chinese restaurants
or Chinese traditional medicine clinics.’   Relatively small but increasing numbers of these independent entrepreneurial Chinese migrants have landed in African countries throughout the continentIn addition to ‘China shops’ some Chinese migrants also run restaurants and Chinese traditional medicine clinics/outlets.   The ‘entrepreneurial migrants’ term incorporates not only the ‘entrepreneur’ who initially sets up the business, but also workers in the business who often include relatives, family friends, or people from the same village/ town in China. Often Chinese retailers and other businesses choose areas where their Taiwanese predecessors had established businesses. For example, in Mauritius, Nigeria, Namibia, Lesotho and South Africa Taiwanese factories  and other businesses were established first, some as early as the 1970s.

In addition to these retail China shops and businesses, several larger African cities
have become home to Chinese wholesale traders. The largest of these are in Johannesburg;  Casablanca is home to several hundred Chinese wholesalers; and Accra, Yaounde and Douala also host several Chinese wholesale markets. Johannesburg has almost a dozen of these large wholesale centres, each of which has several hundred wholesale shops or stalls;   these include China City, China Mart, Asia City, Hong Kong City, Crowne Square, Gold Reef Emporia, Dragon City, African Trade Centre, and Orient City. These form a regional shopping hub which provides goods not just for South Africans but also to retailers and consumers neighbouring countries (Botswana, Lesotho, Zimbabwe, and Angola) and from across Africa.

Founders

 
Brothers Morris and Eli Ross opened Edgars (named for Swan and Edgar of Piccadilly London) in Joubert Street Johannesburg on 6 September 1929 and Eli Ross is credited with being the first to offer ‘six-months-to-pay’ credit during a spring sale.
 
In 1982 the company, still known as Edgars, was acquired by South African Breweries. It launched its Red Square retail chain in 1996 and acquired the struggling stationary retailer CNA in 2002 for R130 million. The company acquired the houseware retailer Boardmans in 2004 for R94 million.
 
 
 
***
 
Edcon is southern Africa’s largest non-food retailer. We have been in business for nearly 90 years and operate in stores across South Africa, Namibia, Botswana, Lesotho, Swaziland, Mozambique, Ghana, Zimbabwe and Zambia. We conduct our business under four principal brands: Edgars, Jet, CNA and thank U.
 
Edgars is targeted at middle to upper-income customers. Jet sells quality value fashion, home and beauty merchandise targeted at lower to middle-income customers. CNA is South Africa’s favourite stationery store, and the perfect complement to a growing, learning nation. Our thank U rewards programme, which includes 14 million customers on its database, allows members to earn thank U points for their purchases in our stores and with our thank U partners.
 
**
 
Edgars, Edgars Shoe Gallery, Edgars Active, CNA, Jet, Jet Mart, Boardmans, Red Square, Legit, Calvin Klein, Victoria Secret, Lucky Brand, Dune, Green Elephant, Salsa, Tom Tailor, Topshop, Geox, Lipsy, TM Lewin, Dr Martens, Vince, River Island, Express, Jigsaw.
 
 
**
 
Edcon is committed to a transparent governance, in terms of King III/IV, process that provides stakeholders with a high degree of confidence that the Group is being managed ethically, within prudent risk parameters and in compliance with legal and regulatory requirements such as the Companies Act, Act 71 of 2008, as well as international best practice.
 
***
 
BOARD MEMBERS
 
GRANT PATTISON
 
Founder of Gpam Pty Ltd., Grant Michael Pattison is a businessperson who has been the head of 9 different companies and currently occupies the position of Non-Executive Chairman for Taste Holdings Ltd., Co-Chairman at Consumer Goods Council of South Africa, Chief Executive Officer of Gpam Pty Ltd. and Chairman & Chief Executive Officer for NRG Renew Africa Pty Ltd.
 
He is also on the board of The American Chamber of Commerce in South Africa and Twincare Group and Chairman at Consumer Goods & Services Ombud and Chief Executive Officer & Executive Director at Edcon Holdings Ltd.
 
In his past career Mr. Pattison was CEO, Secretary & Executive Director at Massmart Holdings Ltd. and Managing Director & Group Commercial Executive at MassDiscounters (Pty) Ltd.
 
He received an undergraduate degree from the University of Cape Town.
 
Taste Holdings Limited
(Apparel & Accessories Retailers)
Non-Executive Chairman 2014
NRG Renew Africa Pty Ltd.
Chairman & Chief Executive Officer –
Gpam Pty Ltd. Chief Executive Officer 2014
Consumer Goods Council of South Africa
Co-Chairman 2009
Consumer Goods & Services Ombud
Chairman 2013
Edcon Holdings Ltd.
Chief Executive Officer & Executive Director 2017
Edcon (Pty) Ltd.
Chief Executive Officer & Director –
The American Chamber of Commerce in South Africa
Director 2011
Twincare Group
Independent Non-Executive Director
 
 
**
 
RHIDWAAN GASANT
 
Mr. Rhidwaan Gasant, B.Compt(Hons), CA(SA), ACIMA, Executive Development Programme, serves as an Independent Non Executive Director of AngloGold Ashanti Ltd. since August 12, 2010. He served as the Managing Director & Chief Executive Officer of Energy Africa Ltd. Mr. Gasant served as a Finance Director of Engen Limited since November 1997 and has held various senior management positions with Engen including its upstream business, from 1990 to 1995, before the listing of Energy Africa. He has 17 years experience in the oil industry. He serves as a Director of MTN Group. He serves as a Chairs the Audit and Risk Committees of international companies in the MTN Group. His other directorships include those in the Rapid African Energy Holdings Group, a start-up oil and gas exploration business focused on Africa, and Edcon Limited. He served as a Director of Energy Africa Ltd. He is a Chartered Accountant from South Africa.
 
Currently, Rhidwaan Gasant occupies the position of Chief Executive Officer for Rapid African Energy Holding.
He is also on the board of 8 other companies.
He previously occupied the position of Chief Executive Officer at Energy Africa Ltd.
Mr. Gasant received an undergraduate degree from the University of South Africa.
 
AngloGold Ashanti Limited
(Gold) Independent Non-Executive Director
Rapid African Energy Holding
Chief Executive Officer –
Edcon Holdings Ltd.
Director –
MTN Nigeria Communications Ltd.
Director –
Edcon (Pty) Ltd.
Director –
MTN (Dubai) Ltd.
Director –
Scancom Ghana Ltd.
Director –
Rapid African Energy Pty Ltd.
Director –
Rapid African Energy Zambia
Director
 
 
**
 
GARETH PENNY
 
Gareth Penny is Chairman of Norilsk Nickel, the world’s leading producer of nickel and palladium. He is Chairman of the Edcon Group, South Africa’s largest non-food retailer.
 
Gareth is a Director and RemCo Chairman of Julius Bär Group, a listed Swiss private bank. He also serves on the Senior Advisory Boards of both TowerBrook Capital Partners, (a New York and London based private equity firm), and Oxford Capital Partners (which focuses on venture capital opportunities).
 
Gareth is the founder of Amulet Diamond Corporation, a private diamond mining company, and is Chairman of Pangolin Diamonds, a diamond exploration company in Botswana, the world’s largest producer of diamonds.
 
 
*
 
A rich vein of mining business runs through Gareth Penny’s career – first in diamonds and now in metals as chairman of Russian mining major Norilsk Nickel.
 
When legendary mining executive Julian Ogilvie Thompson is your godfather, a healthy interest in the sector is inevitable.
 
Gareth Penny, chairman of Russian metals giant Norilsk Nickel, recalls sitting around the dining table on many occasions when he was growing up, listening to Ogilvie Thompson, who was a friend of his father, talk about mining majors Anglo American and De Beers, for both of which his godfather was eventually chairman. At that time, Anglo owned a 45% stake in De Beers; this has since risen to 85%.
 
“At a very early age I had thought I’d join De Beers and try to make a career in the diamonds business because it was really part of my upbringing in those very early years,” Penny tells Metal Market Magazine. And that is precisely what he did.
 
Thirty years ago, a 24-year-old Penny joined Anglo American, working as a management trainee in various departments before moving across to diamonds at De Beers. His first assignment was to set up and run a diamond polishing factory in a village called Serowe, in Botswana’s Central District. Penny was suddenly in charge of around 400 people, recruiting and training polishers from Antwerp, and teaching people how to cut diamonds.
 
“I had no experience in polishing diamonds, but I knew how to manage a business.
 
It was part of an agreement with De Beers to promote downstream beneficiation,” Penny says. Not only did he fall in love with diamonds, he also began a life-long relationship with Botswana – “one of my favorite countries on earth” – that continues today. When he later became De Beers chief executive officer, he worked very closely with Debswana, an equal joint venture with the Botswana government, and also served on the government’s Economic Advisory Council.
 
*
In the early 2000s, Penny became CEO of the group’s marketing arm, the Diamond Trading Company (DTC), and in 2005 was appointed De Beers CEO from the start of 2006 until the end of 2010. With Penny leading De Beers through the “extremely difficult” global financial crisis of 2008-09, the group emerged in good shape and, in 2011, posted its highest earnings ever.
 
*
“What makes me proud is that we weren’t just cost cutting and paying out big dividends – it was actually during the same time that we invested in a totally new mine called Chita. It’s terribly important that you try to invest through the cycle,” Penny notes. “When things go bad and the whole industry cuts back, it means that when things start to improve again you do not have the extra capacity to benefit from this. We brought on new capacity in the down cycle and that will play out positively for Norilsk in the next five years,” he adds.
 
*
Norilsk is currently embroiled in a dispute between its largest shareholders, Vladimir Potanin with a stake of over 30% and UC Rusal, which is controlled by Oleg Deripaska, with a stake of over 27%.
 
 
 
***
 
DAPHNE MOTSEPE
 
Ms. Daphne Ramaisela Motsepe, BR, BCompt, MBA, served as the Managing Director of Postbank and Postbank SA Post Office Group. Ms. Motsepe served as the Chief Executive Officer of Unsecured Lending at Absa Bank Ltd. and its holding company Absa Group Ltd. since January 2010 until her retirement in June 2012. She served as Deputy Managing Director and Business Loans Manager at Get Ahead Foundation, Regional Finance Executive at National Sorghum Breweries …
 
She previously occupied the position of Chief Executive-Unsecured Lending at ABSA Bank Ltd., Managing Director at South African Post Office Bank, Managing Director at Postbank SA and Chief Executive-Unsecured Lending at Absa Group Ltd.
 
Lewis Group Limited
(Home Furnishings Retailers)
Independent Non-Executive Director 2017
Mercantile Bank Ltd.
Director –
Edcon Holdings Ltd.
Director –
Edgars Consolidated Stores Ltd.
Director –
Mercantile Bank Holdings Ltd.
Independent Non-Executive Director –
Thebe Investment Corp.
Director –
Kapela Investment Holdings (Pty) Ltd.
Non-Executive Director –
Alexander Forbes Community Trust
Trustee –
Saveact
Trustee
 
*
 

We are a level 1 BBBEE business that embraces social responsibility and upliftment.

Kapela Holdings, a BEE investment business, owns a 34.69% stake in XON and Kapela Holdings Executive Director Israel Skosana is now chairman of the board of XON while Kapela Holdings non-Executive Director Daphne Motsepe and Executive Director Makhup Nyama serve as Non-Executive Directors of XON.

 
Prior to Kapela, in 2003, we had signed an empowerment agreement with Lungisa Technologies, which resulted in a then BEE ownership of over 40%. Lungisa Technologies was an empowerment company headed up by Don Ncube, one of the icons of business in South Africa.
 
 
**
 
KEITH WARBURTON
 
Keith Warburton is on the board of Edcon Holdings Ltd. and ADvTECH Ltd. Mr. Warburton previously held the position of Chief Operating Officer & Executive Director at Clicks Group Ltd., Chief Financial Officer & Executive Director at Clicks Group Ltd., Financial Director at Truworths International Ltd., Deputy Managing Director at Score Supermarkets Ltd. and Financial Director at Metro Cash & Carry Ltd.
 
Edcon Holdings Ltd.
Independent Non-Executive Director 2016
Advtech Limited (Personal Services)
Independent Non-Executive Director
 
**
 
MATTHEW TURNER
 
Matt J. Turner is on the board of Edcon Holdings Ltd., Codere SA and Arcapita, Inc. In his past career Mr. Turner was Associate of Madison Dearborn Partners LLC, Partner at Irving Place Capital Management LP, Chief Executive Officer at Kaupthing Bank Oyj, Head-Global Private Equity at Bank of America Merrill Lynch International Ltd. (Spain) and Principal at Merrill Lynch & Co., Inc.
 
Codere SA (Casinos & Gaming)
Independent Director 2016
Edcon Holdings Ltd.
Director –
Arcapita, Inc.
Director –
 
 
 
 
 

 

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