By Zeenat Moorad

Edcon, the owner of Edgars, Jet and CNA among others, on Tuesday said it was formulating a comprehensive long-term real estate expansion plan for the years ahead.

Once known as the retail jewel of SA, Edcon was de-listed from the JSE in 2007 when its shareholders voted in favour of US group Bain Capital's 25 billion rand takeover bid - one of the biggest private equity deals to take place in SA.

Edcon's existing Edgars store in Sandton City, Johannesburg is being enlarged to a massive 12,000 square metres, aligned to the group's "flagship" store concept, similar to that of Edgars Melrose Arch.

"We are pleased to announce that Jet will be re-introduced to the Sandton City shopper bringing customers a revamped, visually enhanced concept store," said Michael Pienaar, Edcon group property executive.

Despite challenges in the South African economy, the group's total retail sales rose 7.3%, with comparable same store sales up 6.0% for the quarter ended July 2.

Credit sales for the quarter contributed 52% of total sales, up from 50% for the same quarter in 2010.

"Management believes that the South African economy is sound, and the outlook remains positive despite international economic concerns and some short-term local challenges such as unemployment and rising administered prices.

"Against this background, growth was achieved in spite of the company maintaining a conservative stance in our credit activities with the debtors book continuing to be tightly managed, and store openings being limited," the company said in a statement.

Edcon's department store division which includes Edgars, Boardmans and Red Square increased retail sales by 7.8%, largely due to strong sales in ladieswear, footwear and cellular.

CNA's retail sales grew 3.2%, while the discount division, which includes Jet, Jet Mart, Jet Shoes, Legit and Discom increased retail sales by 7.6%, chiefly through sales growth in childrenswear, ladieswear and cellular.

During the quarter, Edcon issued 1 billion rand in bonds, listed on the JSE. The group also repurchased 39 million euro of bonds listed on the Irish Stock Exchange. These transactions complete the refinancing of the short term hedging liabilities that arose from the original hedging structure implemented in 2007.

The group's new chief executive officer, Jurgen Schreiber, who assumed his role in April, taking over from Steve Ross said Edcon had embarked on a review of merchandise ranges and the flow of goods as well as an analysis of operational processes.

"We expect the benefits from these projects to crystalise later in the financial year. We believe conditions in the South African economy are favourable for the retail sector and we are confident that the business will deliver its growth plan in the months ahead," Schreiber said.

Source: I-Net Bridge