Edgars shrinks to grow profits, says boss

Edgars has cut more than 100 000m² from its national footprint in a bid to restore profitability, a move chief executive Norman Drieselmann says is reshaping the retailer after years of inherited structural problems.

- Hein Kaiser

The brand has reduced retail space from about 465 000m² to 360 000m², saving more than R150 million annually in rent while reporting higher trading densities in major malls.

"Sales are great, but if they are unprofitable then it is just ego," Drieselmann said. "Every rand we ring up has to deliver bottom line profit, otherwise the business is not sustainable."

Some stores have seen lower top line sales after shrinking, but Drieselmann insists this is the unavoidable cost of a turnaround that prioritises margin over volume. At flagship malls, halved floor space produced a five percent sales drop but a R6 million profit improvement thanks to lower operating costs.