Edcon says sales are slipping
Edcon, South Africa’s largest clothing retailer, says third-quarter sales slipped as consumer confidence in the country approached a 14-year low.
|||Johannesburg - Edcon Holdings, South Africa’s largest clothing retailer, said third-quarter sales slipped as consumer confidence in the country approached a 14-year low.
Retail sales at the owner of the Edgars, Jet and CNA chains fell 1.7 percent to R8.69 billion ($558 million) in the three months through December, the Johannesburg-based company said in a statement Friday.
Cash sales climbed 4 percent, while transactions settled at a later date dropped 9.9 percent.
South African retailers and consumers are under pressure as the country’s worst drought in more than a century pushes prices higher, with December food inflation climbing to 5.8 percent.
Meanwhile, a weakening rand prompted the central bank to raise interest rates by half a percentage point last month, increasing repayment costs for those with loans or mortgages.
Read also: Edcon to cut less than 2 000 jobs
“The overall trading environment remained challenging during the current quarter primarily due to higher income taxes, rising unemployment, rising interest rates and a sharp depreciation in the rand,” the company said.
Bain Capital Partners, based in Boston, bought Edcon for about R25 billion in 2007 to tap into rising economic growth in Africa’s second-largest economy. The deal burdened the retailer with debt, which increased 4.1 percent to R22.6 billion year-on-year.
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