South African clothing chains Edgars and Jets have filed for bankruptcy, sending over 270 workers on the streets.
In a notice to employees, EDCON Limited, the owner of Jets and Edgars clothing stores have applied for voluntary liquidation.
They say they are shutting down Jets and Edgars operations in Zambia because the stores have faced unprecedented financial challenges.
They claimed that the business is not making profits in Zambia.
One of the over 270 workers affected said in an interview that the South African bosses have already left the country leaving the workers stranded.
“The company has experienced unprecedented financial difficulties reflected in the poor performance, coupled with the expected massive impact of COVID-19 pandemic on the manufacturing and retail industry, which may likely result in a complete shutdown of EDCON Ltd (in South Africa). We were compelled to critically review our business initiatives, retail footprints and store portfolios,” reads the letter in part.
“Our operations in other territories in Africa could not escape this critical review. In Zambia, the majority of our stores are not profitable in either of our brands (Jet and Edgars) and combined, they recorded a moving annual negative EBIT of R21.3m as at the end of January this 2020.”
The letter also highlighted some factors contributing to the loss as property rentals which were paid in US dollars and South African rands, the requirement to implement computer hardware for the real time monitoring of the sales at a cost of “+R3.5m as well as the cost associated with the supplying of stock to the Zambian operators.
It further stated that the company had considered all possible options in trying to sustain the operation from South Africa without placing EDCON South Africa in more financial hardships.
However, the letter clarified that the company has been unable to secure any significant assistance from the landlords or other key stakeholders in Zambia in that regard.
“It is therefore with regret that we have to inform you that we will apply for a creditor led liquidation in terms of Section 95 (1) of the Corporate Insolvency Act, No, 9 of 2017. The creditor’s meeting will be held on 24 April 2020, where the creditor’s resolution to liquidate the company will be put to the creditors of the company and passed. Meetings will be scheduled with management at which matter of staff welfare will be addressed. PWC have been appointed to manage the process with the assistance of Musa Dudhia and company (attorney).”
Thats called a business decision…..
Ask Bowman Lusambo to direct them to open…….
Zambia is now finished with these Pathetic Fools (PF). They are thieves who have destroyed the economy with unnecessary projects to siphon money for their selfish interests. Hence the reason they want to amend the constitution so that they stay in power for ever!! *****s let sensible people rule.
Sad….either no buying power in Zambia or typical SA way of doing business…go for incentives, then when those are above to expire make the run and come back trading with different name….okay us also, with so many tailors dotted around we have failed to even just make pants for ourselves???
Very unfortunate event. It is expected during this very uncertain time. A lot of business world wide are feeling the pinch of the virus. We will sit down with the top management to ensure our people can get something to at least set them up while looking for next opportunity. Kz. Anyone affected by this, please contact me directly
yaba, some mangwams mwandi
EDCON South Africa is in financial difficulties even in South Africa they have closed a lot of Stores everywhere. the company is considering winding up, especially with the effects of COVID-19.
When we tell you tangible investment is in manufacturing and technology you think …its a joke
Sad. It’s all very wrong. Several people will now not have incomes to support their families..at a time like this! The whole thing of quoting rent in USD is debilitating to renters. If you’re selling stuff in ZMW, to make profit equivalent to USD, you will have to price your goods so highly most Zambians won’t afford them. So where do you get the next rent money?
If Zanbia can learn to put local products first the impact SA products will be less. Government should come with deliberate policy to promote local products. How do you explain chicken, milk and coming from SA. Is it because of the privatization thief?
Bringing in shops as investors…are you telling me Zambians can’t manange shops….even manufacturers clothes we depend on Foreign goods and dunderhead Kaizer Zulu and Lusambo think they’re in Dubai or Los Angeles..
now all non profit companies in Zambia will blame it on COVID 19….brace yourselves
And the President with a safety helmet inspecting a mall please God help us….Office of the President wasting tax players money to go and inspect loss making malls which will soon become white elephants…bandit President Lungu no direction
We know them the incentive’s given to them have expired. Just wait they will come back by a different name. There was SmartZambia etc…but same company. Tired of them let them go and never come back.
We hope a lot more don’t go under, Kabili we are broke to even put up a meaningful stimulus plan unless one is just in denial as usual with them
I think the closure of Edgars is circumstancial looking at their explanatory reason and factors advanced. At this time around it is difficult to navigate operations in Zambia due to this pandemic disease ravaging the the entire globe. They failed to get assistance from landlords and other stakeholders government included, I think this is where the fundamental point of closure lies. The government must intervene and come up with measures to cushion the effect caused to avoid closure and keep the workforce afloat. Bear in mind of PF government is broke and almost everything will falling apart. The economy is in doldrums and it will be soon human being eating fellow human beings. Stay tuned with your government of failures who govern through Facebook
Anonymous – The problem we have in Zambia is the cost of doing business is too high and we have an incompetent PF govt that has zero goals…you can not manage a factory with 12 hours load-shedding…imagine rivers are overflowing but ZESCO is quiet on the status of Kariba, the price of crude is at an all time low but the regulator is quiet and says they are still analyzing.
The president should buy this chain to leave himself a lasting legacy with his name already attached to the shop. On a serious note, Zambia should consider buying some of these businesses to have some presence on the continent.
Kaizar Zulu © , YOUR NUMBER KAILI ??
That tells you the state of the economy. It started with spar closing at arcades. More are still to follow.
The economy before the virus was already in intensive care. All businesses from the small to the very big, retail to wholsale to manufacturing, milling, farming not forgetting mining all were suffering. This was due to load shedding, cost of electricity, cost of fuel all the taxes imposed on companies, dollar was already at K16 and now at K18. The chickens have come home to roost. Everyone will suffer. This is due to inconsistencies in the past 8 years.
We have been crying for PF to help Zambians fall in love with our mother cloth the chitege , like in west Africa , and make them in Zambia to dress Zambians in the beautiful vibrant colours of Africa……
When I am in GRZ , which is very soon, I will advise the president elect on this. No more chitenge comming from china and our tailors and designers will have their day.
The chitenge fabric will rule very soon.
This is indeed sad for our people. For sure let government come in and ensure that our citizens don’t lose any financial entitlement. We hope and pray that God opens up other job opportunities for our people.
You should have focused on reviving Mwaiseni Zcbc and Niec stores