Edgars could be saved by R1.2-billion PIC bailout

[Jamie McKane]

Edgars could be saved by R1.2-billion PIC bailout

According to a report in The Sunday Times, the Public Investment Corporation is considering investing R1.2 billion in struggling retailer Edcon, which owns Edgars.

Edgars is at risk of going under and closing many stores, and asked shopping mall landlords for help and for reduced rentals in a bid to save the company.

 

[Sinbad]

The pic is determined to piss away money isn't it?

 

[Lew Skannen]

Good bye government pensions.....

 

[w1z4rd]

I dont feel this is a good idea. I like that its protecting jobs, but what is the plan? Are they going to change their business model? They will have to to stay competitive. Otherwise we are effectively paying for the equivalent of VHS stores been open just for the sake of been open.

How does Edgars compete against the online retail market. It cant. So now what? Whats the plan to change those jobs into something that will be useful in the future, and not something that will eventually have to be removed because online retail is killing it.

Its great they short term saved these jobs, but whats their plan so those people keep working while their current business model dies?

 

[IzZzy]

Yeah I don’t get this.
If they can’t keep afloat today, how is tomorrow going to be different?

New business plan and reduced debt and reduced interest payments on debt - better balance sheet

 

[Fuzzbox]

Absolutely desperate times.
PIC will pay the money to keep the jobs.
Just prolonging the inevitable.

 

[Nom Chompsky]

I kind of expected some sort of intervention. Ramaphosa doesn't want this bad news right before election time. Also I read that Edcon takes up about 7% of all retail space in SA - not likely to be replaced easily given the current economic environment.

 

[supersunbird]

The Edcon CEO said nothing is wrong, thus no saving is needed.

 

[supersunbird]

New business plan and reduced debt and reduced interest payments on debt - better balance sheet

Sure worked for SAA...

 

[theratman]

The Edcon CEO said nothing is wrong, thus no saving is needed.

Thought the same thing when I read the headline. If the CEO thinks the issue is overstated them stuff em, they'll pi$$ away the money anyway.

 

[Mampara]

Shops are too big,too many in close proximity of each other, overpriced clothing, outdated business model and too much spend on TV advertising when online advertising is way to go.

 

[Former member 61586]

So on top of all the POS SOEs that have to be bailed out, private companies are now also to be added to the list. ****.

 

[Polymathic]

What is the PIC exactly? If it is government linked entity all they need is Edgar's to survive till after the elections

 

[Kosmik]

You get a bailout, you get a bailout, EVERYONE GETS A BAILOUT!!!!!!

 

[Mephisto_Helix]

Keep bailing out everything in a failed state .... the mind boggles

 

[satanboy]

Ramaphosa doesn't this bad news right before election time.

 

[ForceFate]

The Edcon CEO said nothing is wrong, thus no saving is needed.

The same guy that decided to keep CNA in its current form...

 

[R13...]

What is the PIC exactly? If it is government linked entity all they need is Edgar's to survive till after the elections

They're probably hoping to save jobs before and after the elections. The PIC is mainly GEPF and they do invest in ventures that don;t make sense because part of their mandate is supporting the "developmental" economy and they have enough resources to make most companies do what they want through buying stakes.

 

[IzZzy]

And how is this magic business plan going to materialize when they got to where they are and had the opportunity to produce it years ago.

Different CEOs, different financial position.

To clarify - I am involved in the rescue effort (was last time around as well)

 

[BBSA]

They may just let it die. To get your economy healthy, you should not artificial support sick business.