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The reason Edcon is still going Following the successful R2.7 billion refinancing of retailer Edcon's debt, CEO Grant Pattison anticipates a future where the group can once again "become independent and sustainable." The subsequent strategy to restructure the Edgars, Jet, Jet Mart and CNA brands with more than 1100 stores in southern Africa and 40 000 direct employees is ambitious, Pattison admitted at a recent GIBS forum. He has committed to fewer, but larger Edgars department stores with improved customer experience and service levels: "We plan to invest in stores and a curated experience, rather than pushing product and price." There will also be a renewed focus on the financial services offering. Pattison described the business as part discounter, part department store and part financial services provider. The credit offering is a very important part of the business and we have to get back to the discipline of running that properly," he said. Edcon recapitalisation The recapitalisation programme, which was approved by the Competition Commission at the beginning of May, sought to mitigate the dire financial position the Edcon Group found itself in and avoided potential liquidation, which would have resulted in substantial job losses. The deal concluded binding agreements amongst existing secured lenders, the Public Investment Corporation on behalf the Unemployment Insurance Fund and participating landlords. The deal will result in the removal of all of Edcon's interest-bearing debt and introduces a new group structure and set of shareholders. After initial failed process to attract new investors, Edcon approached the PIC for funding. All roads led back to the PIC," Pattison explained, "as no one else had that kind of money." Following the successful completion of the recapitalisation deal, Pattison said he felt corporate debt, specifically bonds, need more stringent regulation. Pattison said he had been encouraged by the broad support received, and the show of unity and partnership among existing lenders; the ministries of Economic Development, Labour and Finance; labour unions and participating landlords. Realignment strategy Pattison joined Edcon's executive management team in June 2017 and was appointed as chief executive in January 2018. Although the group has had a series of foreign chief executives in its recent past, a South African candidate was preferred to run the business. "Fashion is local, and credit retail is particularly local," Pattison said. Accepting any leadership position requires deep due diligence to understand the financials of a company, he said. "You need time to get into a business and understand it, especially in a turnaround situation. My initial realignment strategy was to open stores, but that destroys value and is in fact totally different to the strategy we ended up with." Pattison called his realignment of Edcon a "shrink strategy" with plans to focus on fewer department stores and bring Edgars' beauty offering back in-store with the reabsorption of the Red Square brand. Foreign retailers entering the South African market have had a massive effect" on Edcon's business, Pattison said. The group's response, which was to invest in more international, stand-alone stores has drawn customers out of the department store, he explained. "Our competitors got it right with an increased focus on more local brands." Future plans include building the Spanish clothing brand Mango as well as Edgars' private label brands in an attempt to attract high-end shoppers back into the store. The first 'new' Edgars store has play areas, personal shoppers and a section where you can print your own t-shirt Following the recent deal with landlords, the Public Investment Corporation and creditors that saved the group (which also includes Jet and CNA) from bankruptcy, the embattled 90-year-old retail chain Edgars has opened a new concept store- a 8,000 square metre space in Fourways Mall in Johannesburg. The store features trees, play areas, and a section that allows you to print your own text or images on clothing. Edgars is now doubling down on fewer but larger department stores, a strategy that didn't work for Stuttafords, which went out of business two years ago - after almost 160 years in South Africa. But Edgars believes its new concept store shows that "retail isn't dead, only boring retail is dead". The new store is designed for pure experience, says Edgars chief executive Mike Elliott. "In line with future retail trends, we're prioritising interaction over transaction." This means that the store has big areas that are not devoted to shopping, but to other activities - including play areas, a coffee shop and "beauty rooms", where customers can get makeovers. Edgars thinks the new store is a bit like a town square, "a multi-sensory, tree-lined central social space". A "bespoke" Mugg & Bean coffee shop is located in the central square of the store. Fashion, cosmetics and homeware sections are spread out over two floors. Instore services include personal shoppers... and a "custom" zone where you can personalise clothing with printed or embroidered text as well as images (starting from R50 an item). Alongside beauty counters, the new store also has "beauty rooms that will house cosmetic events, home demonstrations, and new launches. There are also play areas for kids and digital screens with in-store music. Each department is set up with tracks, and can be easily moved to another part of the store, to shake things up. The Edgars store in the V&A Waterfront in Cape Town will be the next in line to get a makeover, and its relaunch should be completed by next year. The new store format may be a last roll of the dice for Edgars, as the group struggles to survive a perfect storm of a weak South African economy, new foreign competition (particularly from H&M, Cotton On, and Zara), and a massive debt load, which has snowballed since the American investment firm Bain Capital bought it in 2007. This year, landlords, the PIC, and banks pumped R2.7 billion into Edcon in either cash or rent reductions to save the group. Source: https://city-press.news24.com/Business/the-reason-edcon-is-still-going-not-a-single-person-wanted-the-deal-to-fail- 20190530 and https://www.businessinsider.co.zaew-edgars-store-2019-8. Question 3 (25 Marks) Analyse the role of Grant Pattison in implementing the strategy that Edgars has chosen. A discussion on leadership and characteristics of leaders drawing evidence from the article 3 Question 3 25 A discussion of the responsibilities of a leader in strategy implementation process

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