Edgars staff fear ‘looming’ job losses
|Published
EDCON board passed a resolution to file for business rescue after the company lost R2 billion in sales due to the coronavirus pandemic. Supplied EDCON board passed a resolution to file for business rescue after the company lost R2 billion in sales due to the coronavirus pandemic. Supplied
Durban - THE staff at Edgars fear retrenchments are looming after Edcon - a clothing, footwear and textiles retailing group - announced it was under business rescue.
Last month, the Edcon board passed a resolution to file for business rescue after the company lost R2billion in sales due to the coronavirus pandemic.
The loss in sales meant that Edcon, which owns Edgars, was unable to pay suppliers for March and April.
In a statement, Edcon said it would require assistance from the UIF Covid-19 Temporary Employee/Employer Relief Scheme to pay staff salaries.
The group also anticipated that sales at stores would be below what it was used to in the coming months.
Grant Pattison, the chief executive of Edcon, said although the doors to stores were open, it was still under business rescue.
“In the short time that has been available to us, we have been unable to raise the funds needed to pay the creditors for the March and April month-ends.
“In this circumstance, South African law requires that the company either be placed in liquidation or business rescue.
“To provide us with a longer period to raise the money, the board has taken a decision to file for business rescue.”
Pattison added that they would work closely with the appointed business rescue practitioners, shareholders and the government.
“It is my hope that some version of the business will emerge to continue to serve customers.”
An employee, who has worked at a branch in Durban for more than 10 years, said the staff were afraid retrenchments would soon be introduced.
“Edcon recently closed the Edgars branches in West (Dr Pixley KaSeme) Street and the Westwood Mall in Westville. The staff were retrenched and those who were not retrenched were sent to the bigger stores.
“If they decide to close more branches, I don’t think there will be space at the bigger stores for more staff, so I believe they will retrench us.”
She said after learning about Edcon’s financial state, they questioned their managers and were allegedly told not to worry.
“We were told we are fine and not to worry about the financial situation, but it is scary. I have a family to look after. I have already started looking for other jobs in case the company goes into liquidation.”
She claimed the staff were told they would receive their full salaries until June. However, at the end of April she and her colleagues got 60% of their salaries.
“We were told the company could only pay 60% and the UIF grant would pay the remaining 40%. Two days after receiving our salaries, we got the UIF payout.
“But it makes me wonder what will happen this month and the month to follow.”
Another employee said she attended a staff meeting and they were advised to remain calm. The mother of one blamed Edcon’s current situation on poor management.
“We were doing well, but about four years ago the stakeholders decided to open more stores. I believe this is where the problem started.
“They opened branches close to each other, like at the Gateway Shopping Centre and Cornubia Mall, which makes no sense. It was unnecessary and costly.”
She added that stores were no longer getting new stock from their distribution centres in Johannesburg or Durban due to the lockdown.
“During a staff meeting last week, we were told the centre in Johannesburg was not open yet. We have not received stock in a while and our buyers have not been paid yet.”
She said if a retrenchment package was offered, she would accept it.
A third employee said he felt stressed by Edcon’s financial situation.
“It’s worrying that we are relying on debt rescue. The next few weeks will be challenging. I have my own home and help my parents financially. I am already thinking of ways to save, so I can survive in the weeks to come.”
In a statement issued by Edcon, the company said all its staff received their salaries in April and that its distribution centres in Johannesburg and Durban were open.
Edcon further stated that it had scheduled staff in line with the lockdown regulations and ensured all hygiene protocols and social distancing were maintained.
“We are focused on trading, serving our customers and keeping our employees safe and healthy during this time. Our priority right now is to adhere to the level 4 regulations and whilst remaining vigilant, to focus on the re-opening of our business.”