TFG to Buy Some Edcon Jet Stores in $28.7 Million Rescue

JOHANNESBURG (Bloomberg) — The Foschini Group Ltd. agreed to buy fellow South African clothing retailer Jet for 480 million rand ($28.7 million), the second deal agreed by administrators in charge of salvaging Edcon Holdings Ltd. from bankruptcy proceedings.

TFG will acquire the Jet brand alongside at least 371 stores and stock valued at about 800 million rand, the Cape Town-based company said in a statement on Monday. Employees and some senior management will be retained alongside a distribution center in Durban.

The move represents a change of heart for TFG Chief Executive Officer Anthony Thunstrom, who said last month that, while Jet is an attractive business, it didn’t make sense to try and untangle its relationship with Edgars, the 91-year-old chain that was also part of Edcon. Private equity-backed Retailability Pty Ltd., a holding company for South African brands Legit, Beaver Canoe and Style, agreed to take over part of Edgars last week.

Edcon was put into a local form of bankruptcy protection in late April, after a five-week strict lockdown to contain the coronavirus in South Africa wiped out sales and curtailed a recovery from a 2019 restructuring. As well as Edgars and Jet, administrators are also trying to dispose of Thank U, a loyalty card and finance unit.

TFG shares jumped 9.1% in Johannesburg on Monday, the most in more than a month.

The retailer, which trades in South Africa, Australia and the U.K., said its sales have also been hurt by lockdowns across its regions. Revenue declined 43% for the three months ended 27 June. Shareholders will vote on a plan to raise almost 4 billion rand in a rights offer later this week.