The embattled Edcon Group has announced the sale of CNA to a consortium of investors led by JSE-listed Astoria Investments.
The buyout is led by Jan van Niekerk, who heads asset manager RECM and Calibre (RAC) together with Piet Viljoen. RAC took control of Mauritius-based Astoria last year.
All of the 167 CNA stores, along with the brand, will be sold as part of the transaction, which still needs to be approved by the authorities. The transaction value was not disclosed.
Edcon CEO Grant Pattison explains: “Edcon has a simple business model that is focused on delivering an enhanced customer experience, and an optimized store portfolio, ultimately creating a focus on our three divisions: Edgars, Jet, and Thank U.
“As I have always said, CNA is an important but not a strategic part of the Edcon business, as it is not focused on clothing, beauty and home categories, and we would only sell if it’s good for CNA.
“The new owners have the muscle and extensive management focus and leadership expertise to invest in the business. I am also pleased that this transaction will not result in any job losses.”.
According to a statement, the Astoria consortium intends to focus CNA on books, stationery, magazines and gifting.
"We believe that this transaction will be welcomed by staff, landlords and suppliers including publishers, both locally and internationally” said Astoria Investments.
"The ongoing process of consolidating, merging and rebranding of the businesses, will ensure an offering of a selected set of private and some international brands, while also being a fashion and beauty retailer that provides credit”.
Edcon has been staring into a financial abyss for the past couple of years. It has billions in debt, which have snowballed since American investment firm Bain Capital bought it in 2007.
Last year, the group was saved from collapse by securing a R2.7 billion lifeline - a deal struck with landlords, the Public Investment Corporation, and creditors.
The loss-making Boardmans and Red Square chains have since been shut, and a number of prominent stores – including the Edgars in Rosebank mall, and various CNA outlets – have been closed.