South Africa’s dominant department-store retailer, Edgars Consolidated Stores (Edcon), has an aggressive growth strategy that includes opening the equivalent of one new store every four days and acquiring existing retail chains that complement its portfolio. To support this plan, the company has standardized processes and centralized procurement for the sourcing of its private-label as well as branded merchandise.
Since opening its first store in 1929, the Johannesburg, South Africa-based company has become a leading clothing, footwear and textiles retailer in the sub-Sahara region and has recently added stationery, housewares and general merchandise to its product mix.
Store brands are grouped into two divisions. The department store division includes Edgars, CNA, Boardmans, Prato, Red Square and Temptations. The discount division includes Jet, Jet Mart, Jet Shoes, Legit and Blacksnow.
Primarily a bricks-and-mortar retailer, Edgars and CNA also have e-commerce sites, but online sales represent a small percent of Edcon’s overall business. In April 2007, Edcon was acquired by Bain Capital, Boston, which owns a number of U.S.-based retailers including Babbages, Michaels and Staples.
Calvin Low, business integration executive at Edcon with responsibility for Edcon’s IT projects, development projects and acquisitions, spoke with Chain Store Age about strategic initiatives that will support the company’s aggressive plans.
“Following the acquisition by Bain Capital, we identified areas where we could make improvements that would enable the company to pursue its aggressive growth plan. One of the key areas that we have focused on is sourcing excellence,” Low said. “We have undertaken a broad-ranging project that will create more efficient global-sourcing processes and procedures.”
Edcon sources from approximately 1,500 suppliers around the world as well as from local manufacturers and agents. Approximately 40% of its goods are sourced internationally from roughly 25 countries. Its largest supplier is Hong Kong-based Li & Fung, which provides primarily house-branded items in both soft-line and hard-line categories. In addition to the private-label m