Retailability plans 50 new community stores after cutting more than 100 000m² of retail space and slashing annual rental costs by R150 million.

The retailer is betting its future on smaller formats after slashing excess floor space, boosting profits and reducing annual rental costs. Image: Waldo Swiegers/Bloomberg

Six years after its parent company, Edcon, collapsed into voluntary business rescue, South African retail icon Edgars is embarking on a major expansion drive that hinges on completely reversing its historic “bigger is better” department-store model.

The turnaround strategy, orchestrated by Durban-based Retailability since its September 2020 acquisition of the brand, has required an aggressive structural downscaling. Over the past three years, the company has systematically executed a rightsizing programme across its national retail presence, carving out and returning more than 100 000 square metres of underperforming trading space to commercial landlords to drive up floor-space productivity.

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The massive spatial trim included halving the floor space at major flagship nodes, which resulted in a minor 5% sales drop but generated a R6 million profit improvement alongside R150 million in annual rental savings. Having deflated large-format liabilities and trimmed unprofitable categories, the retailer is utilising that leaner base to fund a rolling rollout of smaller formats:

• Decentralised mini-stores: Preparing to open 50 smaller, new-generation community-focused stores over the next two years, with the first sites breaking ground in July and August.
• Cosmetic and tech verticals: Investing in its standalone 18-store Edgars Beauty network, specifically targeting regional Boland micro-markets like Paarl and Stellenbosch, alongside the July launch of its first standalone cellular store, Edgars Connect.
• Mass middle-market apparel: Scaling its standalone ladies’ fashion brand, Kelso, out of its pilot phase with a fourth location at Tygervalley.

Retailability CEO Norman Drieselmann emphasised that the aggressive footprint pruning was a disciplined real estate calculation rather than speculative top-line growth: “We respect the 97-year heritage of this brand deeply, but we run the business like a start-up that is completely fixated on its customers. That combination is powerful, and it is working. We made very deliberate decisions to ensure that every store is the right size for the market it serves. The work we have done over the past three years has paid off.”

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While the broader South African retail sector remains primarily focused on defensive consolidation and efficiency, management maintains that smaller community formats allow the group to trade sustainably in regional hubs where it previously could not.

“At 97 years old, this brand still has significant growth ahead of it,” Drieselmann stated. “We see real opportunity, and we are going after it with both the respect this brand deserves and the hunger of a business that is just getting started.”