5 of South Africa’s major companies who have fallen due to the deadly Lockdown

As lockdown regulations ease and thousands of businesses try to re-establish themselves, there are some large corporations who have, even though age-old, fallen from grace. These trusted names in our country, have served millions of people, over generations, yet, are now facing a grizzly reality. 

Already in a balancing act prior to lockdown, due to our then haemorrhaging economy, these corporate giants simply could not withstand the insurmountable pressure placed on them for such a long period of time. 

Yes, COVID-19 is a threat to our lives but, losing companies who employ tens of thousands of people, makes us ask ourselves, “was the extended lockdown a blessing or a curse?”.

The Newcastillian – Online Daily News sadly lists the following 5 highly prized companies, who will soon be but a memory. 

Edcon

Established on 6 September 1929, Edcon grew to become one of the largest non-food retailers in Southern Africa. Over the past 90 years, very few people can say they have not been in one of Edcon’s stores.

Edgars, CNA, Jet and Red Square are brands we as South Africans are all too familiar with. However, Edcon is now facing a tough reality. Prior to the lockdown, Edcon was already facing financial difficulties. Difficulties which became utterly overwhelming.

In March, CEO Grant Pattison told suppliers that Edcon cannott settle its bills. Furthermore, he said there was a strong possibility, the company would not be able to re-open after the lockdown. Soon after, Edcon filed for bankruptcy. 

Retailability, the company which owns the Legit chain, has claimed it will buy some of the more profitable Edgars stores, while others will be closed. A similar agreement is apparently underway for Jet.

Associated Media

Established in 1982, Associated Media was one of South Africa’s leading independent media houses. It is well known as a publisher of women’s magazines, which included Cosmopolitan, House and Leisure, Good Housekeeping and Women on Wheels.

The media house ceased publishing as of May 1. According to Julia Raphaely, the CEO of Associated Media, the unexpected and devastating impact of COVID-19, causing the closure of printing and distribution channels, the global halt on advertising spend, as well as the inability to host events for the foreseeable future, have made it impossible to continue trading.

Pretoria Society of Advocates

After 120 years of existence, the Pretoria Society of Advocates is bankrupt and expected to dissolve.

The society owes millions in rent for the High Court Chambers in Madiba Street, as well as other expenses, which it apparently cannot pay.

While its financial situation was a matter of concern prior to COVID-19, it seems the nationwide lockdown was the final nail in the coffin.

Comair

Established in 1946, Comair, which operates British Airways in SA and owns kulula.com, filed for bankruptcy protection during the lockdown. To protect its assets, Comair went into voluntary business rescue in May, after the pandemic prevented it from implementing a turnaround plan.

While there were various challenges in securing finance to continue the business rescue process, Comair has apparently received R40 million in short-term bridging finance,

According to Tourism Update, Comair CEO Wrenelle Stander confirmed the funding to employees on Sunday, August 9.

She said this would allow business rescue practitioners, the necessary time required to assess two offers submitted by potential investors. Stander added the assessment would inform the publication of the business rescue plan, scheduled to be published on August 28.

Prada in South Africa

While not a major corporate in South Africa, this is a global company who is highly respected. Losing brands like these, represents a change in our way of life, especially if more premium brands follow suit. 

When it comes to fashionistas, very little can compare to the coveted Prada brand. In 2015, the Italian fashion brand opened its first and only store along Sandton City Shopping Centre’s Diamond Walk. Despite being a haven for local Prada enthusiasts, the store shut its doors in May, yet another victim to the COVID-19 virus.

As well-known brands find themselves succumbing to the pandemic, can we put the sole blame on the virus and the effect it had on the economy? Or was it the government’s harsh lockdown restrictions which provided the fatal blow to the South African business powerhouses? 

Author: Quinton Boucher

Edited: Calvin Swemmer