Edcon to retrench more than 22,000 staff - report
South African retail group Edcon has reportedly sent out retrenchment notices to all staff after it failed to field concrete offers from potential buyers.
This is according to a report by the Daily Maverick, which stated that management and the business rescue practitioners (BRPs) had no choice but to proceed with the business rescue plan as conceived by joint BRPs Lance Schapiro and Piers Marsden and approved by Edcon creditors in early June.
The report further stated that last week the company issued section 189 notices to 22,000 full-time and temporary employees across the group.
This is more than half of the group’s 39,000 full-time and temporary employees and deals a massive blow to SA Inc’s efforts to protect jobs.
In a statement published on 9 June, Edcon’s Business Rescue Practitioners (BRPs) said that the company has paid salaries to staff in the months of April and May and is expected to make the June 2020 salary payment.
“The practitioners can confirm that the payment of salaries will continue to be a priority during the business rescue period, subject to trading conditions and continued support being received from the TERS and UIF processes,” it said.
Edcon's Chief executive officer (CEO) Grant Pattison announced via a conference call on The Money Show, hosted by Bruce Whitfield that the company is unable to pay its suppliers.
Pattison got very emotional and started sobbing because many of their suppliers are SMMES and that the company only has sufficient liquidity to pay salaries at this time.
He said: "The failure to meet the March sales targets, and the expected drop in collections of the debtor’s book, will mean that the business only has sufficient liquidity to pay salaries, which it deems a priority during these extremely uncertain times. As a result, Edcon is unable to honour any other accounts payable during this period."
Written by: Staff Writer.