Nov. 27 (Bloomberg) — Edcon Holdings (Pty) Ltd., South Africa’s largest clothing retailer, said second-quarter sales rose and losses narrowed compared with last year as the retail environment improved slightly from the first quarter.
The loss was 592 million rand ($67 million) in the three months through September, versus 1.2 billion rand a year earlier, the Johannesburg-based company said in a statement today. Sales advanced 3 percent to 5.8 billion rand.
“Retail-sales growth for the second quarter of 2013 was marginally improved when compared to that of the first quarter,” said the company, controlled by closely-held Bain Capital LLC.
Bain, based in Boston, bought Edcon in May 2007 for 25 billion rand in an effort to tap rising consumer spending in Africa’s largest economy. Growth in South African retail sales slowed to an annual 4.3 percent in September after reaching a 12-month high of 8.6 percent in June.
Consumer spending in the nation of 51.8 million people is under pressure amid unemployment of 25.5 percent and economic growth that slowed to to 1.2 percent in the third quarter from the previous three months, the lowest since the 2009 recession. The Reserve Bank cut interest rates to a more-than 30-year low of 5 percent on July 19 to support economic growth.
“Edcon’s sales are significantly lower than other players out there,” Chris Gilmour, an analyst at Johannesburg-based Absa Asset Management, said by phone today. “It suggests they’re losing market share.”
Truworths International Ltd., a competitor, said Nov. 8 sales for its first 18 weeks of trading through Nov. 4 rose 16 percent. The Foschini Group Ltd., another apparel retailer, said its first-half sales through September climbed 13 percent.
Edcon has 24.4 billion-rand debt of which 13.1 billion rand will mature in 2014, according to data compiled by Bloomberg. Edcon this year sold its private-label store cards in South Africa for 9.5 billion rand to Barclays Plc’s Absa Group Ltd., a South African bank. The company has used the proceeds to settle 4.3 billion rand of debt.
“The balance of the proceeds will be used to reinvest in the business for refurbishing, but the majority will go to repay debt,” Mark Bower, chief financial officer, said during a conference call today.
Chief Executive Officer Jurgen Schreiber said Aug. 21 that listing the company on the Johannesburg Stock Exchange remains an option “but isn’t a focus.”