Bain Capital loaded Edcon with debt — South Africa’s biggest retailer collapsed 2020

Edcon was South Africa’s largest clothing retailer, operating brands including Edgars, Jet, and CNA across more than 1,400 stores at its peak. The company was founded in 1929 and listed on the Johannesburg Stock Exchange in 1945. It was a South African retail institution, serving millions of customers across all income segments.

In 2007, Bain Capital acquired Edcon in a leveraged buyout for R25 billion, delisting the company from the JSE. The deal loaded Edcon with massive debt. By 2016, the company’s net debt had reached R24.7 billion. Edcon was temporarily taken over by its creditors to avoid collapse. The company closed 253 stores and cut thousands of jobs between 2016 and 2018, but the turnaround failed.

When South Africa imposed a hard COVID-19 lockdown in March 2020, Edcon ran out of cash. The company filed for business rescue on 29 April 2020, putting approximately 5,000 jobs at risk. Edgars was sold to Retailability, Jet to The Foschini Group, and CNA to a Mauritian holding company. The Bain Capital takeover became a textbook case of private equity over-leverage in emerging markets.