eBusiness Weekly
Business Writer
The Competition and Tariffs Commission (CTC) has approved the acquisition of Zimbabwe Stock Exchange-listed entity and one of the country’s leading clothing retailer and manufacturer, Edgars Limited by a Mauritian investment management firm SSCG Africa Holdings.
SSCG Africa Holdings, which also has interests in local micro-finance Untu Capital, was given the go ahead to acquire a 41,07 percent stake in Edgars, which was previously held by struggling South African retail group Edcon.
Edcon was forced to restructure its operations after it went through turbulent times and nearly collapsed before being bailed out through R2,7 billion facilities by several lenders, including the Public Investment Corporation of South Africa.
The deal, which was approved by the CTC “without conditions,” will see SSCG buy 100 percent of Bellfield, the investment vehicle through which Edcon held 41,07 percent of Edgars.
“As a result of the acquisition, SSCG will have direct control in Edgars,” the CTC said in a notice.
This deal is the final separation of Edgars Zimbabwe and its erstwhile parent and follows the previous one, which saw the two entities agreeing to a US$1,5 million deal that allowed the local unit to acquire the Edgars and Jet trademarks from Edcon.
That deal had seen Edcon increase its stake in Edgars from 38 percent to 41 percent only to dispose the entire stake to SSCG.
Edgars is the largest clothing retailer, with 25 branches located throughout the country. It also controls 25 Jet Stores, the Club micro-finance unit as well as Carousel, the garment manufacturing factory based in Bulawayo.
In its trading update to May 2019, management said profit after tax had grown $8,7 million from $1.3 million last year while EBITDA increased by 524 percent to $16,3 million.
Turnover was up 90 percent on last year but unit sales decreased by 16 percent with recent improvement for the Jet chain with positive unit growth for April of 6 percent and May, 10 percent while Edgars posted a 6 percent unit growth in May.
June dollar turnover was trending above 200 percent over the prior year until the announcement of SI 142 after which growth slowed down to around 100 percent.
