Yesterday I read an article about Edgars in the media and a quote left me in absolute amazement and bewilderment …..”The move is the brainchild of new CEO Grant Pattison…….” This comment was in reference to the decision to close chains Red Square, La Senza, and Boardmans.
If this is a brainchild decision that has taken the Edgars group 10 years and five CEOs to realise it’s the only direction to follow, then Edgars have far bigger issues in front of them than closing some stores.
Let me give you a simple example….If you were Pick’N Pay and you had a 4000m2 store in a regional mall, let’s say Eastgate. Would you open up another four small pick in pay stores in the same mall, one selling canned foods only, one selling cleaning product, one selling frozen foods and another selling butcher meat. No you would never do that as you are already selling all those goods in your main store, why replicate in other outlets and pay more rental, extra capex to fit the stores, and additional four managers and staff to run the stores. (Not a brainchild decision).
This is what Edgars did when they had a 6000m2 store in a mall and then went ahead and opened a Red Square, Boardman’s, La Senza, Edgars Active, Tom Taylor, Etc etc, selling the exact same product as what was on offer in the main store. The strategy was a disaster only pushing up the cost of staff, rentals. inventory, capex, and taking away sales in the main Edgars store in the mall.
Its not difficult. Close all the expensive non Edgars stores, save the running costs, along with inventory investment and make the one Edgars store in the mall profitable. Your selling the same product anyway.
The new CEO Grant Pattison ex Massmart who is use to selling fridges and braai equipment has come up with this move to save Edgars. In reality it has been glaring at Edgars for ten years but no one could recognise and execute. Very sad.
He wants five years to make it happen and reduce floor space by 17%. I’m not sure if Edgars have five years. I understand some store leases need to run out before a store can close, but aggressive management could negotiate with landlords and other retailers and make it a focus to be out of those stores in two years. Then Edgars would have a possible turnaround strategy.
enjoy your shopping