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2016 S&V Newsletter No 02, January 18

S&V Footwear and Leather Goods / S&V African Leather

 

Exclusive

Footwear Trading to lose Skechers, but sale to Bounty Brands going ahead

Johannesburg (SA) – Footwear Trading is to lose the Skechers distribution licence for southern Africa, after 22 years, at the end of February.
The new licensee will be Brand-Folio LLC, which is the regional distributor for Skechers in the Middle East, the rest of Africa, and the Commonwealth of Independent States (CIS) – the former Soviet Union.
The loss of the brand will not affect the impending sale of Footwear Trading to Bounty Brands, according to Footwear Trading MD Stan Kotkin, although the deal has been renegotiated.
That sale agreement is to be finalised by the end of February.
He said Footwear Trading’s other principals, Diesel, Fila, Jeep and Levi’s, had agreed in principal to the sale, in some instances with modifications to their contracts which have to be ratified by Bounty Brands.
In the case of Skechers, however, Footwear Trading has been representing the brand without a contract for 10 years.
“That was the closeness of the relationship,” Kotkin said. “We were their second international licensee – Australia beat us by about 3 weeks.”
Neither Skechers CEO Michael Greenberg nor CFO and COO David Weinberg responded to a request for comment.

 

US Government issues strong warning to Alibaba on counterfeits

From an American Apparel & Footwear Association (AAFA) newsletter in December:
On December 17, the Office of the United States Trade Representative (USTR) released its annual "Notorious Markets" Out of Cycle Special 301 report for 2015. The report strongly criticizes Alibaba, singling Alibaba and its platforms out for the most extensive discussion and criticism of any market mentioned. Our view, which has been reiterated by USTR, is that the report sends a strong warning to Alibaba. In the report, USTR complains that Alibaba take down procedures are too slow, difficult to use, and lack transparency. The report outlines specific tasks Alibaba needs to take in the next year, advising that it will spend that time looking for "evidence” that these reforms are "demonstrably effective in addressing ongoing concerns." The report calls out a number of other markets that were identified by AAFA in an October 5 submission to USTR. – Steve Lamar.

 

Zambeef operating profit up 189%

Lusaka (Zambia) – Zambeef Products Plc, which includes a tannery and footwear factory, recorded a 189% increase in operating profit for the financial year to September 30, 2015, shareholders were told at the group’s annual general meeting in Lusaka on December 21.
The company’s operating profit increased by K106 million to K162 million, from K56.2 million in 2014. Meanwhile, profit before tax excluding exchange losses, increased by 728% to K107 million, equivalent to US$15 million in US dollar terms.
Zambeef’s core cold chain food products division performed exceptionally well, recording an increase in gross profits of 29.1% in kwacha terms. Its growing retail network now totals 150 outlets from the previous 139, and continues to play a vital role in enhancing the operations of the division. The division, which includes the production, distribution and retailing of beef, chicken, pork, fish, dairy products and eggs, is expected to drive the growth of Zambeef in 2016 with more outlets planned by the company as well as through its partnership with Shoprite.

 

Milestones

Durban (SA) – Eric Majoor, KZN agent for Michelle Footwear and its predecessor, GL Footwear, for 39 years, resigned in October last year
His son, Grant, has been appointed as an in-house representative for Michelle for the same area, and also as national sales manager for its Froggie Barefoot Science division.
At Soul of Africa, the charitable trust which operates from Michelle, former GM Stephanie Keast left in December. Tony Ford has been appointed Acting GM. Michelle has changed trading name to Froggie.

KwaDukuza, SA – Former member of Trendsetters cc, MH Moosaji, died on August 15 last year, his son, Khalil Ahmed informed us during Directory updating.

Cape Town, SASue Coelho, who previously represented Diesel, Fila and Skechers from Footwear Trading’s Cape Town office, has resigned, and has moved to Johannesburg. She will join Franco Ceccato as men’s, boys’ and sport footwear buyer from February 1.

Cape Town, SA – At Pep Stores, men’s and school footwear buyer Ashley Kruger left Pep late last year and had not been replaced at the time of writing. Karen Louw replaced Jeanette de Jager as baby footwear buyer.

Durban, SA – Edcon regional quality audit manager Annelize van der Elst resigned in December and will be emigrating to Australia. No appointment will be made until the group’s restructuring is done.

 

Reaction to call for manufacturers to assist importers

Thanks for the newsletters, it’s always enjoyable catching up with the gossip. I’m interested in the comments made about local manufacturers looking to tie up with the importers for additional business due to the devaluing of the Rand against the USD? I hear your point and do agree to a point. I do however have some concerns for the following reasons.

Would you agree with the following;
The Rand has devalued around on average 21-24% over the last couple of months.
All factors of production have increase in cost, therefore all operating expenses would increase. I include shipping costs here.
All imported raw materials have increased in cost, even though it’s possible to negotiate better base price from China.
Financing replacement raw materials is a challenge bearing in mind the current state of the industry. Extended terms is what I refer to.
SO
How is a local manufacturer going to finance or get additional working capital to finance the growth, in this case additional pairage? The DTI? (I have my own opinion about this) Is there sufficient skilled labour available to pick up this increase in demand? Yes, there are training centres, but with no demand this trained labour will exit our market and move to other markets that will allow for earning of income.
Are these importers going to accept the local ex-factory pricing? I keep hearing the same story from manufacturers, “retail is not accepting any increases!”, “I can get this shoe for X- Dollars why should I pay you more?”, and so on and so forth.
With SA’s history with the labour federations, how stable is the labour market going to be?
Stability of pricing particularly with regards to raw materials, is the market going to accept a shift from the traditional way of doing business?
Just some thoughts to bore you with, I’m all for the growth of our industry. I detest (maybe a strong word) negativity and negative people. The reality of our (industry) situation is for me in one phrase “IT IS WHAT IT IS”. It’s going to be one hell of a ride so buckle up. – Mario Zanninello, mario@tuftex.co.za, +27 (0)31705 2211

 

MSc leather students leave for UK

Pretoria (SA) – The 10 students selected to study towards the MSc Course in Leather (Professional) at the University of Northampton left on January 7. There will be a report in S&V African Leather later this month.

 

ABSA Agri Trends 27/11: Hides & skins prices

The average hide price traded slightly higher over the past week at R13,11/kg green due to currency fluctuations. Hide prices are determined by the average of RMAA and independent companies.
The average price for Dorper skins traded higher at R78.75/skin and Merino traded lower at R71.11/skin.

 

They Said It

"It's coming ... much like doomsday!" - Rafiq Hajat of Footwear Centre in Malawi, after being prodded to send in his comments on trading conditions, carried last week. In an earlier email, he admitted: “The locals all call me Mavuto, which means trouble!”



"I’m wearing shorts, which for me is the definition of being on leave." - Equator Accessories’ Leon Buhr, speaking on Friday. He’s back at work today.

"Whichever way this industry turns, it seems to be stumped." - Merit Shoes’ Peter Capsopoulos on the fact that even with a drastically weaker Rand, the competitiveness of local manufacturers is constrained by imported components.

"You know you love me. You treasure these little moments." - Leather Finishing Products’ purchasing manager Ursula Scott, phoning to book space in the Directory after the publication closed. It’s not the first time she’s demanded the impossible – and got it.

  

Birthdays this week

18/01/????: Mary Dean, retired, formerly Amber Footwear [closed], Pietermaritzburg.
18/01/1944: Jenny Fenwick, Saddler Belts & Leathercraft, Durban.
18/01/1958: Carol Schroeder (neé Williams), retired, Durban.
18/01/1970: Lionel Gericke, Genuine Connection Promotions, Paarl.
20/01/1933: Peter Smith, retired, formerly Wallheimer Leathers (closed), Durban.
21/01/1951: AS Patel, Farini Shoes, Durban.
22/01/1972: Gavin Sack, Footwear Discounters, Johannesburg.
23/01/1944: Gerrie Botha, Steps Shoes @ Barclay, Pretoria.
24/01/1937: Dan Naidoo, Togo Shoes, Pietermaritzburg.
24/01/1969: Yolander Lotter, Comfy Feet Shoes, Jeffrey’s Bay.

 

In Memoriam this week

18/01/2002: Frank Mellon (b. 04/02/1930), Valmell Components, Durban.
19/01/????: Thomas Anthony (Tony) O’Sullivan (b.08/06/1928), Vogue Shoes and others [closed], Cape Town.
20/01/2010: Johan Bester (b. 08/11/1936), ProGlove, King William’s Town.
22/01/1997: Charles Lintner, Bata SA, Pinetown.

 

 


Classified Adverts


ISLAND STYLE GAUTENG FOOTWEAR AGENT NEEDED

Ideally a well-connected footwear sales agent based in Gauteng currently servicing independent and chain footwear retailers in Gauteng to represent ISLAND STYLE Footwear exclusively in Gauteng.

 

Please will all interested agents send their applications directly to ISLAND STYLE for the attention of Warren Wareing Email: ceo@islandstyle.co.za Mobile: 083 7764633.

 


EXTERNAL SALES REPRESENTATIVE

Prime Fastener are looking to expand their current external sales representative teams in both their Cape Town and DBN offices to start immediately?

 

Please email your CV to Gina Isserow on: gina.isserow@primefastener.com

 

Responsibilities;
  • Source new sales opportunities through inbound leads, follow-up and outbound calls and service existing customers.
  • Understand customer needs and requirements.
  • Close sales and achieve sales targets.
  • Research accounts, identify key players and generate interest.
  • Maintain and expand your database of prospects within your assigned territory.
  • Team with the sales force to build and close deals. 

 


  

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: January 25, 2016

 

 

 

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