Edcon turns to COVID-19 UIF programme to pay salaries this month

The group, which owns Edgars and Jet, wants to file for voluntary business rescue within the next few days.

FILE: An Edgars store. Picture: EWN.

JOHANNESBURG - Edcon said it would need assistance from the COVID-19 Unemployment Insurance Fund (UIF) programme to pay salaries at the end of the month.

The group, which owns Edgars and Jet, wants to file for voluntary business rescue within the next few days.

The decision follows years of financial turbulence that saw the company introduce a major restructuring plan last year.

The cash crunch at Edcon is nothing new, with the company saying a decline in debt collections had made it difficult to pay suppliers.

In a statement, the group said it lost about R2 billion in sales since the coronavirus outbreak began in the country, making it difficult to pay salaries.

Its explained that last year’s radical turnaround strategy was also stifled by other challenges, including the country’s economic recession in the third and fourth quarters.

CEO Gran Pattison is hoping that going under business rescue will buy the company time to raise more money: “So, for the next couple of months it will be business as usual while we try to get funding to save us.”

Edcon said it would still open its stores on Friday when government eased the lockdown regulations.