South Africa’s retail clothing chains Edgars and Jet have filed for bankruptcy, leaving over 270 employees jobless from its operations in Zambia.
In a notice to employees, Edcon Limited, the holding company of Jet and Edgars stores said it has applied for voluntary liquidation.
According Edcon, it is winding down Jet and Edgars operations in Zambia because the stores have faced unprecedented financial challenges. The company claimed that the two businesses are not making profits in the Southern Africa landlocked country.
A worker affected by the liquidation who spoke on condition of anonymity, said South African bosses have already left the country leaving workers stranded.
“The company has experienced unprecedented financial difficulties reflected in the poor performance, coupled with the expected massive impact of COVID-19 pandemic on the manufacturing and retail industry, which may likely result in a complete shutdown of Edcon Limited (in South Africa). We were compelled to critically review our business initiatives, retail footprints and store portfolios,” reads the letter in part.
In the statement Edcon added: “Our operations in other territories in Africa could not escape this critical review. In Zambia, the majority of our stores are not profitable in either of our brands (Jet and Edgars) and combined, they recorded a moving annual negative EBIT of R21.3m ($1.2m) as at the end of January this 2020.”
A creditor’s meeting will be held on April 24, 2020, where the creditor’s resolution to liquidate the company will be put to the creditors of the company and passed.
