CNA has new owners and Edcon is going to retail basics
Here's what to expect from its 167 stores.
Edcon Group, the South Africa-based retailer that owns Edgars and Jet stores, has sold stationery retailer, CNA to a consortium of investors led by Johannesburg Stock Exchange-listed Astoria Investments.
The sale will include all 167 CNA stores as well as all brands and trademarks, with the business continuing to trade under the CNA brand name.
CNA — formerly known as Central News Agency — dates back to 1896, when it was formed by two newspaper sellers in Johannesburg. Edcon acquired it in 2002.
Edcon, which was rescued by the Public Investment Corporation, lenders, tenants, and unions following a R2.7 billion lifeline last March, said that the sale was in line with its broader strategy shift from non-core operations. It said its focus was now on a fashion and beauty retail that provides credit.
“Edcon has a simple business model that is focused on delivering an enhanced customer experience, and an optimized store portfolio, ultimately creating a focus on our three divisions: Edgars, Jet, and Thank U,” said Edcon chief executive Grant Pattison (pictured).
“The ongoing process of consolidating, merging and rebranding of the businesses, will ensure an offering of a selected set of private and some international brands, while also being a fashion and beauty retailer that provides credit.
“As I have always said, CNA is an important but not a strategic part of the Edcon business, as it is not focused on clothing, beauty and home categories, and we would only sell if it’s good for CNA.”
In the space of a week, Grant has overseen the acquisition of the Edcon Store Card debtors book by consumer finance business RCS (previously it was owned and managed by Absa) and the return of the group’s customer call centre, which had been outsourced to Accenture. This is part his turnaround strategy at Edcon, whose troubles started after private equity firm Bain Capital delisted it in 2007 at a cost of R25 billion and borrowed money in foreign currency to support its retail operations.
Much of the closure of unprofitable CNA stores and downsizing was done under Grant in 2019 when he closed 150 unprofitable CNA, Jet and Edgars stores.
Grant said that the new owners have ‘the muscle and extensive management focus and leadership expertise’ to invest in the business. Astoria Investments said that it intends to focus CNA on the original building blocks of its founders, with books, stationery, magazines and gifting at its core.
The outlets will be community-focused: supporting and encouraging reading while catering for the entire stationery needs of consumers throughout South Africa. “We believe that this transaction will be welcomed by staff, landlords and suppliers including publishers, both locally and internationally,” said Astoria Investments.