Edgars needs buyers to make binding offers

Bloomberg

Edgars needs buyers to make binding offers by the end of June to prevent the start of wind-up proceedings, putting at risk the future of a South African clothing chain that has traded for almost a century.
Administrators for parent Edcon Holdings Ltd put the retailer up for sale alongside sister companies Jet and Thank U after measures to contain the coronavirus cut off sources of revenue. Fifteen parties have expressed interest in one or other of the companies, although it remains to be seen how many will follow through on their proposals.
The sale process is the culmination of years of struggle at Edgars, which was founded in central Johannesburg in 1929 and sells clothes, shoes and cosmetics from just over 200 stores. As part of Edcon, Edgars was included in an ill-fated buyout by US private equity firm Bain Capital Private Equity LP in 2007, which burdened the parent company with debt just as the economy hit a downturn following the global financial crisis.
“It would make a good case study of how a darling can fall from grace,” said Rella Suskin, head of research at Benguela Global Fund Managers in Johannesburg. “Cash flows have been used to service the interest burden, leaving little to be invested in maintaining the strength of the brand and keeping up with retail trends.”
Edgars, Jet and Thank U employ 17,292 permanent workers between them and hire about 5,000 more on a seasonal basis, according to a rescue plan compiled by a team led by business-recovery specialists Lance Schapiro and Piers Marsden. Thousands more are dependent on the shops through supplier networks. South Africa’s jobless rate was at 29% even before the arrival of Covid-19 forced untold thousands out of work.
Goldman Sachs Group and hedge fund Apollo Global Asset Management are among secured creditors with claims of 3.73 billion rand ($218 million), while the list of suppliers and other service providers owed money runs to 100 pages.
Schapiro and Marsden initially tried to find a buyer or investor in the whole of Edcon, but none was forthcoming.