97-year-old clothing retailer rolling out new stores across South Africa

Edgars is planning to roll out 50 new-generation community-based stores across South Africa over the next two years.

This followed a successful turnaround strategy, where the 97-year-old clothing retailer optimised operations and cut costs.

To understand the significance of this news, it is important to turn back the clock to April 2020, when Edgars’ owner Edcon entered voluntary business rescue.

After years of financial distress and operational missteps, exacerbated by the 2020 lockdown, Edcon was unable to meet its obligations.

In September 2020, South African retail group Retailability, which owns brands like Legit and Beaver Canoe, bought Edgars out of business rescue.

Through this acquisition, Retailability saved over 10,000 jobs and took over 120 stores in South Africa. It also signaled a change in strategy.

Under Retailability CEO Norman Drieselmann, Edgars shifted away from the ‘bigger is better’ department-store model and began focusing on trading density and margin.

Edgars cut more than 100,000 square meters of retail space from its national footprint, saving the company R150 million annually in rent.

Although the smaller stores led to slightly lower sales, they dramatically improved Edgars’ profitability and sustainability.

For example, halving the floor space at some flagship locations resulted in a 5% sales drop but a R6 million profit improvement due to lower operating costs.

In these smaller stores, Edgars focused on fashion, footwear, and cosmetics, which have been its best-selling products.

They trimmed non-core, unprofitable categories and invested in an improved cosmetics and fragrance range to drive high-margin foot traffic.

The strategy worked well, and Edgars is now on a sustainable path and is focusing on growth rather than cost reduction.

Edgars rolling out new stores across South Africa

Edgars currently operates more than 100 stores across South Africa and is preparing to grow its network with many new additions.

It will open 50 new generation community-based stores over the next 2 years, with the first locations scheduled to open in July and August.

Retailability CEO Norman Drieselmann said the performance of their smaller stores with core product lines has exceeded expectations.

These stores are delivering stronger productivity and larger basket sizes while creating a more agile platform for growth.

He said that, in addition to their main fashion stores, Retailability continues to invest in complementary growth opportunities.

One example is the standalone Edgars Beauty network, which currently operates 18 stores. They are planning to open new stores in Paarl and Stellenbosch.

July will also see the launch of Edgars Connect, the brand’s first dedicated standalone cellular store, extending the retailer’s reach into a high-growth category.

Drieselmann said that their recipe for success is straightforward, but takes discipline to execute and stay focused.

“We respect the 97-year heritage of this brand deeply, but we run the business like a start-up that is completely fixated on its customers,” he said.

Drieselmann said that Edgars’ expansion is not growth for growth’s sake. “We made decisions to ensure that every store is the right size for the market it serves,” he said.

“We see real opportunity, and we are going after it with both the respect this brand deserves and the hunger of a business that is just getting started.”