Edcon makes its play for stationery chain CNA.

Posted On Tuesday, 01 October 2002 02:00 Published by
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Clothing and related goods retailer Edcon yesterday tossed its hat into the ring for the liquidated stationery chain CNA.
Clothing and related goods retailer Edcon yesterday tossed its hat into the ring for the liquidated stationery chain CNA.

Edcon said in a statement its bid for CNA was part of its strategy of expanding beyond the clothing, footwear, textiles and accessories market.

The clothing retailer said aside from CNA's target market overlapping with those of its Edgars and Jet chains, there were synergies between the businesses with regard to property, systems and distribution. Edcon said it was potentially a good fit provided the price it was offered was fair.

The group said it also had the restructuring experience to refocus and reposition the business.

An analyst said although there were benefits for Edcon in taking over CNA, it would be surprising if it actually succeeded in buying the chain.

The analyst said the fight to get CNA would be a difficult one for Edcon, as it was up against Shoprite and some private equity firms.

Giving a further reason for the possible acquisition, Edcon said it regarded its core competence as trading and retailing. It said it had shown this in its ability to sell products such as financial services and cellphones, and was moving into general goods through its purchase of Super Mart.

The move away from clothing had already started earlier this year with Edcon buying the Gauteng-based Super Mart chain for a R70m initial payment and up to R70m over the next three years depending on earnings.

The group did not believe there was an inherent difference between selling books and clothing. .

Edcon said the negotiations with the liquidators were for between 120 to 140 stores.

The analyst said Edcon was trying to 'cherry pick' the stores it wanted.

Business Day

Publisher: Business Day
Source: Business Day

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