JOHANNESBURG – A leading union claims South Africa’s largest clothing and textile retailer could be on the brink of collapse with the loss of 140,00 jobs unless a rescue fund can be mobilised. Edcon is the leading clothing, footwear and textiles retailing group in South Africa trading through a range of retail formats. In December 2018 it was reported that the business and its subsidiaries were close to financial collapse and seeking a deal with store owners to reduce rental payments. Edcon disputed the reports but did state that it was working towards a eliminating company debt and a deal to prevent the closure of its stores. COSATU-affiliated Southern African Clothing & Textile Workers’ Union SACTWU now claims that should a rescue package not be agreed “it will unleash a socio-economic disaster, unprecedented in the recent history of the clothing, textile, footwear and leather sectors.”
SACTWU stated: “The terrible multiplier effects on the poorest of the poor and the economy at large would be too ghastly to contemplate. Most workers in these sectors are from some of the poorest parts of the country, such as Ladysmith, Isithebe, Newcastle, QwaQwa, Botshabelo, Atlantis, Caledon, Babelegi, Fort Jackson, Zwelitsha, Despatch and Mogwase. All of them are black, and the majority are single mothers supporting, on average, at least 5 family members on their weekly wages.
“We call on the Unemployment Insurance Fund (UIF) and Public Investment Corporation structures to urgently fast-track approval of a priority rescue funding plan for EDCON. There is no time to delay.”
The struggles of Edcon have gone relatively unreported in the international media. However, they offer evidence that the current crisis in fashion retail is very much an international affair, with serious potential knock-on effects along apparel supply chains. Edcon is a clear case in point here: if it were to fail, it would not only be South Africa garment and footwear manufacturing firms that suffer. Garment manufacturing units in Lesotho, Mozambique, eSwatini, Tanzania, Madagascar and Mauritius which all supply to Edcon would all take a hit should the company fold.