CFT retailer to sell a portion of manufacturing div

03 Aug '06

2 min read

In an effort to reinvigorate its clothing manufacturing arm as well as help support dti objectives to strengthen the sector, Edcon announced its intentions to sell 51 percent of its manufacturing operation to a consortium comprising management and staff and the newly-appointed Executive Chairman, John Comley. A consultation process with labour will continue.

Comley is well-known in industry circles for having revived Eddels, a shoe factory in Kwa-Zulu Natal where Celrose is located, by introducing innovative worker-participation and incentive schemes to enhance both productivity and profitability.

To facilitate the transaction Edcon is providing finance for the purchase price on very favourable terms. Edcon will have a 49% interest in a new company to be formed, which will hold the assets, and will in addition guarantee an agreed-upon overdraft facility to fund ongoing working capital requirements.

“After consultation with stakeholders, we have decided to retain a share in the business,” said Edcon CEO Steve Ross. “All current and future orders will be processed to ensure minimal disruption and Edcon will continue to be supportive of the new company to grow its business. The factory has clean inventories, a reputable client base and a strong order book – we think the business is in a good position for this transaction to be successful.”

Celrose's newly-appointed Executive Chairman, John Comley, believes in a multi-skilled, empowered workforce which is financially and philosophically aligned with the business objectives. Eddels shoe factory, where Mr Comley is Chairman, has increased productivity, reduced turnaround time on orders, boosted profitability and all but eliminated staff turnover.

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