Edcon starts retrenchment process nationally

DURBAN – Clothing retailer Edcon, is one of the recent companies in South Africa to take a financial hit from the national lockdown that had to be enforced due to the Covid-19 pandemic. This week Edcon sent out retrenchment notices to its staff. This clothing company owns Edgars, CNA, Jet, Edgars Beauty and Legit. It is known as the largest non-food retailers in South Africa.

Edcon has sent approximately 22000 retrenchment letters to their staff across South Africa. Edgars and Jet stores which are most likely in the firing line, has approximately 17 000 permanent staff and 5 000 part-time staff nation-wide. Edcon has been in some financial trouble for a while.

Edcon in a statement said the company’s downfall was: “Poor sales, the recession in the South African economy exacerbated by frequent load-shedding disrupting purchasing patterns, and the advent of Covid-19 which resulted in the government implementing measures including the initial 45-day hard lockdown period which prohibited trading of non-essential products.”

Lance Schapiro, one of Edcon’s business rescue practitioners (BRP) said: “The Business Rescue Plan is still in its preliminary phase, and as such, as at today no binding offers have been received and therefore, we cannot predict which parts, of Edcon will be successfully sold. Therefore it is prudent to start consultations with all employees, in terms of Section 189”.

However, the Congress of South African Trade Unions (Cosatu), is requesting BRPs at Edcon to look at all avenues first, before resorting to drastic measures during the Covid-19 pandemic.

The union’s Sizwe Pamla said: When companies feel some pain, the first thing they think about is to let go of workers, which is totally unacceptable, it has become a norm in this country. And these companies are still going to come back to the government to ask for subsidies and bailouts.”

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