The Edgars Group – From Rags to Riches and Back Again

The retail industry in South Africa has faced many challenges since the start of the Edgars Group in 1929. This iconic brand found its way into the hearts and minds of South Africans who needed to clothe themselves and their families, often through access to credit so that goods and services could be paid off over time – enter the six-months-to-pay account.

The Edgars Group has gone through many phases in its history—revered as the leading retailer in its segment, only to fall on hard times. In 1998 the Edgars Group was again fighting for existence when Steve Ross was brought in by SAB to help turn the company around. For the first two years, he focused on positioning the group to offer better value to customers and to stop competing internally between brands. After two years the company had started to make good inroads and again became the darling of the investing community on the JSE. With an attractive 31 % market share, private-equity investors bought out the company and took it private in 2007.

In hindsight, the deal could not have happened at a worse time: the 2008 sub-prime lending crisis suppressed retail sales and left the group struggling to service a high-interest burden from that leveraged buy-out. Lacking capital to invest in stores, merchandise, people, and systems, the group lost relevance to fast-changing consumer demands.

Two restructurings and recapitalisations later, by December 2019 the group was showing progress – then COVID-19 hit. Lockdowns crushed consumer confidence and sales, halting recovery. The board had no alternative but to place the company in business rescue.

The challenge became how to sell off businesses and assets to maximise value and save jobs. Today that rescue has succeeded: over 10 000 jobs saved. The Edgars chain was sold to Retailability as a going concern with 125 profitable stores; the Jet chain was sold to TFG with 430 profitable stores—preserving two iconic brands.

Nimble moved quickly to remote work at the start of lockdown. Credit markets remained functional; armed with funding from the IFC to purchase distressed debt, Nimble’s acquisition team sought solutions for parts of the debtor book not sold to RCS. Nimble reached a fair deal with the Business Rescue team while ensuring returns for its stakeholders. The transaction created 200 new positions and a new KZN office—in the middle of lockdown.

Joining Nimble has been an enlightening experience for the former Edcon team, most rewarding as we watch colleagues who once faced unemployment rise to the challenge of new roles in a young, dynamic company where people are at the heart of the business.

Author: Ian Wood, Nimble Group Executive