Ex-Myer CEO Bernie Brookes says “the green shoots of change” can be seen at South Africa’s largest non-food retailer, after Edcon enjoyed its best period since the first quarter of fiscal 2016.

The clothing and footwear retailer increased its pro-forma adjusted EBITDA by 12.7 per cent for the three-months ended 24 June 2017. During the first quarter FY2018, Edcon’s pro-forma adjusted EBITDA increased from R314 million to R354 million.

Like-for-like retail sales decreased by only 1.4 per cent, while Edcon’s department chain, Edgars’ like-for-like sales rose 1.6 per cent over the quarter.

Edcon’s total revenues decreased by R394 million, or 6.1 per cent, from R6,442 million in the first quarter 2017 to R6,048 million in the first quarter 2018.

The gross profit margin for the first quarter 2018 was 38.9 per cent, 60 bps higher from 38.3 per cent in the first quarter 2017.

“The merchandising strategy across Edcon of rationalising suppliers and range, ensuring fresh and relevant stock, as well as more competitive pricing, has resulted in an improving customer franchise and more consistent dealings with our trading partners,” said Brookes, CEO Edcon. “We are also continuing to invest heavily in customer research, testing and feedback mechanisms in all major decisions.”

Retail sales from Edcon’s other business – CNA and the various mono-branded stores – was R457 million, a decrease of R311 million, compared to retail sales of R768 million in the first quarter 2017.

“Whereas our strategy implementation is well underway in Edgars and Jet, we have just completed the ‘test and learn’ process for CNA and Active, where we intend updating the business models,” said Brookes.

“Both these chains will benefit from a revamp over the next year.”

Part of the revamp will include ‘the strategically planned exit of unprofitable international brands’ including Lucky Brand, Tom Tailor, River Island, One Green Elephant, Geox, Express and others, which commenced during fiscal 2017.

Edcon said it will also turn its focus preparations for the pre- and Christmas-period activities, where approximately half of its annual EBTDA is generated in a single month.