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S&V Weekly Newsletter Vol.3 No.7, February 20, 2017

This Newsletter is sponsored by SAFLIA

Apologies for the lateness of this Newsletter. We are in the final stages of producing the Directory.

Please note: Click on any ad to go to the advertiser’s website

 

Chinese component price hikes: ‘More to come’

Prices of ‘run-of-the-mill’ synthetic upper materials out of China rose by around 3% in December and a further 4% this month, according to A Greenaways (Natal) member Garth Ribbink. He said more expensive materials had risen more. He said Chinese suppliers had warned of more increases ahead.
        “The only thing protecting the industry is the exchange rate,” he said.
        Quoting a financial report from last November, he said China’s producer prices “rose at the fastest pace in more than 5 years in November as prices of coal, steel and other building materials soared, boosting industrial profits and giving firms more cash flow to pay off mountains of debt”.
        That report viewed the increases in a positive light, noting that the “stronger-than-expected 3.3% surge in prices, along with upbeat factory readings from China, the US and Europe, add to the views that the global economy may be slowly reflating again”.
        For SA’s footwear industry, however, he said any weakening of the Rand would see the full impact of the price increases being felt locally. “If manufacturers don’t start increasing their prices to retail now, they’ll be caught in a position where they will be trying to pass on much bigger increases.”
        Ian Gordon, national agent for Topside Footwear, said the price of TPR compound from China had increased 60% from February 2016.
        Topside imports almost all its components. “We buy thread and adhesives here,” he said. “All the rest would be more expensive to buy locally. We even import our printed shoe boxes, and those have also gone up sharply.”

 

Edcon 3rd quarter sales 2% down on previous year

Johannesburg (SA) – Edcon’s 3rd quarter sales, including most of December, were down 2% on the previous year, CEO and MD Bernie Brookes told suppliers this week.
        In a letter dated February 21, he wrote:
        “Total revenues decreased by R185 million, or 2.0% from R9,163 million in the third quarter 2016 to R8,978 million in the third quarter 2017, which was due mainly to the weaker retail sales. Retail sales, which decreased primarily as a result of weak credit sales, were 2.8% lower at R8,441 million in the third quarter 2017 from R8,685 million in the third quarter 2016. Credit sales decreased by 8.7% whilst cash sales increased by 0.7% compared to the third quarter 2016. Retail sales in October and November of the current quarter were below expectations, but trading in December 2016 improved and was better than expected, largely as a result of numerous peak trading initiatives that we introduced over the period.”
        At the Edgars division, retail sales decreased by R87 million or, 2.5%, from R3,552 million in the third quarter 2016 at R3,465 million in the third quarter 2017.
        The discount division “continues to be negatively affected by declining credit sales. Credit sales decreased by 9.2% compared to the third quarter 2016, and cash sales decreased by 3.0% due to customers in this division being more susceptible to difficult macroeconomic circumstances. Total retail sales decreased by R151 million, or 4.9%, from R3,101 million in the third quarter 2016, to R2,950 million in the third quarter 2017.”
        At the Specialty division, total retail sales for the third quarter 2017 was R1,838 million, a decrease of R7 million, or 0.4% compared to retail sales of R1,845 million in the third quarter 2016. Credit sales decreased by 4.7% whilst cash sales increased by 1.1%. Ladieswear, menswear, childrenswear, cosmetics and homewear reported positive sales growths compared to the third quarter 2016, while footwear, cellular, reading, stationery and entertainment and digital underperformed.
        Sales from other African countries decreased by 1.4% compared to the third quarter 2016, and contributed 10.6% (8.6% excluding Zimbabwe) of retail sales for the third quarter 2017, slightly up from 10.5% (8.5% excluding Zimbabwe) in the third quarter 2016.
        “Progress has been good,” he wrote in closing. “There is new energy, excitement and urgency among our 48 000 employees, and I am certainly encouraged that a new, strong and robust Edcon is fast becoming a reality, and which is set to re-emerge as the leading clothing retailer in Africa.”

 

S&V Directory imminent

The annual S&V Leather, Footwear and Leather Goods Directory will be out very shortly. Anyone wanting copies is asked to URGENTLY email their requirements. The unit price is R450, but discounts for multiple copies will be offered.
        The 2017 has been extensively revised. Listings include over 500 leather companies, nearly 300 component, equipment and service suppliers, over 600 manufacturers and importers, over 2 000 retailers of types, plus commission agents, podiatrists and orthotists, support organisations, government departments and more.
        Countries covered are South Africa, Botswana, Ethiopia, Kenya, Lesotho, Malawi, Mauritius, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. – [tony@svmag.co.za]

 

 

Have you pre-registered yet to attend the India Leather & Footwear Trade Expo in Cape Town in March?

Cape Town (SA) – The Council for Leather Exports (CLE), an initiative of the Ministry of Commerce & Industry, Government of India, invites all chains and independent store buyers, importers, distributors, agents and other important industry decision makers to attend their top class event featuring 45 reputable manufacturers from India. The trade expo will take place on 8 & 9 March at the CTICC in Cape Town. The exhibitors will be showcasing their latest ranges exclusively to the Southern African industry including –

1. Ladies, men’s, children’s leather and non-leather footwear
2. Leather Garments
3. Leather goods including handbags, belts, wallets, gloves, travel portfolios, etc
4. Finished leather – buffalo, cow, sheep and goat
5. Safety footwear and gloves
6. Shoe Components -  welt and veneer heel covers, soles, shoe lasts, shoe uppers, etc.

The Council for Leather Exports will also be present at the show to provide invaluable assistance and information to South African businesses regarding sourcing from India. Pre-register your visit on-line at www.urexpo.com today and receive the following on arrival at the show next month -
* Free entrance – your badge will be printed on arrival at the show
* A show catalogue listing all participants and their contact details
* Complimentary tea/coffee and delicious pastries in the business lounge inside the hall
The exhibitor list is available from the local show organiser, LTE – leaders in trade exhibitions. Contact Deidre Harte on Tel: +27 21 790 5849 or Email: deidreh@worldonline.co.za

 

Micam: Attendance up 5%

Milan (Italy) – The 83rd edition of Micam closed last week with attendance up 5% at 44,610, according to a release.
        Visitor numbers were 26,505 international (up 8%) and 18,105 Italian (up 1.2%). Of the 1 405 exhibitors, 795 were Italian and 610 international.
On the international front, the number of visitors from Russia grew by 18% and from Ukraine by 20%. South Korea was the best performer, with numbers up by 53%. Among European visitors, numbers from Germany increased by 10% but decreased by 7% for France.
        “The sensational new development of this edition was marked by the presence of Fendi, Ferragamo, Gucci, Prada and Tod’s, which chose to attend the event for the first time ever to do their bit to support Italian manufacturing and the young designers at the show,” the report said

 

 

They Said It

"Thank you for putting my birthday this week in your Shoes & Views. Maybe I’ll get lots of presents now. Had a thought the other day, the more birthdays you have the longer you live!!" - Ian McDonald, retired former owner of Specialty Threads.

 

Interventions and progress made by DAFF on drought

From Makenosi Maroo, Chief Director: Stakeholder Relations and Communications
Pretoria (SA) – The Department of Agriculture, Forestry and Fisheries has made significant and palpable progress with regard to drought relief interventions nationwide. DAFF went through a difficult period last year because of the drought. The continued low rainfall resulted in very dry conditions with drought being reported in all nine provinces. As a result eight provinces, excluding Gauteng, were declared a state of drought disaster.
        As part of its continued efforts to assist distressed farmers, DAFF engaged with all relevant stakeholders regarding the drought situation to find solutions to the drought disaster which the country is facing. DAFF further requested funds for drought assistance from the National Treasury through the National Disaster Management Centre (NDMC) in the Department of Cooperative Governance and Traditional Affairs (COGTA), following the verification of drought situation in the declared areas.
        As a result of these assessments; National Treasury made an amount of R212 million available for the financial year 2016/17 to assist affected farmers across the country. Provinces have made R198 million available through equitable share funding. These funds were utilised to assist the affected farmers. Funding from programmes such as the Prevention and Mitigation of Disaster Risk (PMDR) programme were also expended with interventions on borehole drilling and construction of fire breaks.
        DAFF management in consultation with NDMC and National Treasury took a decision to procure animal feeds on behalf of the provinces based on, but not limited to, the following reasons:

  • Allocated timeframe within which the Scheme must be implemented
  • To control financial mismanagement and unaccountability
  • To enhance monitoring and evaluation as well as reporting
All the affected provinces are implementing the allocated R212 million as part of assistance to the affected farmers. Deliveries and distributions of feeds are almost complete in the affected provinces. DAFF is expected to continue offering much needed support to the affected farmers. – [+27 (0)12 319 6787, +27 (0)72 475 2956, MakenosiM@daff.gov.za]

 

 

Birthdays this week

20/02/1959: Rashmi Kooverjee, Babu’s, Cape Town.
20/02/1969: Dada Segwe, Bontsho Bosweu Shop, Vryburg.
20/02/1973: Bridget Johnson, Bibbi Shoes, Johannesburg.
21/02/1975: Zubair Desai, Leather Loft, Stanger/KwaDukuza.
22/02/1967: Shabir Ahmed Moola, Moola’s Newcastle.
22/02/1970: Ebrahim Akoon, Urban Legends, Bloemfontein.
22/02/1982: Katherine Bischoff, Leatherband, Johannesburg.
23/02/1949: Jeff Burland, retired, formerly United Fram/Wayne Plastics, Johannesburg.
24/02/19??: Harry Adams, Finlam Textiles, Pinetown.
24/02/1954: Linda Gordon, Riversdalse Skoenwinkel, Riversdal.
24/02/1973: M Taljaard, Taljaard Shoe Store, Germiston.

 

In Memoriam this week

20/02/2004: Barry Dowson (b. 1938), Barry Dowson Components [closed], Greytown.

Do you have any names you’d like to add to our list of birthdays and In Memoriam? Please send the details.

 

ABSA Agri Trends 31/01: Hides & skins prices

The average bovine hide price over the past week was R14.65/kg green. Hide prices are determined by the average of RMAA and independent companies. “The recent strength of the currency and pressure from the demand side has been adding pressure on prices. There may also be stocks still sitting from December, which further add pressure on prices.”
        The average price for Dorper skins was R47.33/skin and Merino was R95.29/skin.

Hide & skin price progression
Date Hides/Kg Dorper/Skin Merino Skin
19/01 15.34 45.56 81.38
24/01 15.17 40.92 89.52
31/01 15.10 46.00 94.55

 

Trade Fair dates

For a list of local and international trade fairs covering footwear, leather goods, leather and PPE, visit our website: http://www.svmag.co.za/events.php

 

Contact us

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

Next newsletter: February 27, 2017.

Should you wish to subscribe email tony@svmag.co.za
Our website www.svmag.co.za

 

 

 

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