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S&V Weekly Newsletter Vol.4 No.26, July 2, 2018

This Newsletter is sponsored by SAFLIA

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

 

Long4Life buys Rage

Johannesburg (SA) – Investment holding company Long4Life is to buy Rage Distribution (Pty) Ltd and its 555 stores for R3.9 billion, according to a SENS announcement on June 26.
       Long4Life also owns Holdsport, which has the Sportsmans Warehouse and Outdoor Warehouse chains. Its other subsidiaries are unrelated to apparel.
       In the announcement, Long4Life said:
       "The Acquisition provides a unique opportunity for Long4Life to acquire a market leading company with an aspirational brand targeted at the mid-to-lower LSM segments. Rage has a strong national footprint with significant potential for further store roll-out and product growth, both in South Africa and in the rest of sub Saharan Africa. Rage presents an exciting opportunity to build on Long4Life’s existing lifestyle brands platform with additional cross selling opportunities. The addition of Rage will amplify Long4Life’s retail product offering to include all segments of the LSM market.
       "Rage is managed by an experienced management team headed up by Jeffrey and Merle Gochin. Jeffrey, Merle and the rest of his team will remain with Rage and will also become significant shareholders of Long4Life post the Acquisition. Jeffrey will be appointed as a director to the Board post the Acquisition.
       "The Board anticipates that the Acquisition will be earnings accretive from day one on a full 12 months basis.
       "The purchase consideration is R3 915 million based on the Business achieving revenue of R1 250 million, EBITDA of R360 million and net profit after tax of R263 million for the year ending 30 June 2018 (of which R232 million was earned for the 11-month period ended 31 May 2018) and our initial assessment of the Business’ performance for the year ending 30 June 2019. Rage’s revenue and tangible net asset value for the 11- month period ended 31 May 2018 was R1 125 million and R512 million respectively. This information was sourced from the Business’ unaudited management accounts which are subject to verification by the Board as part of the due-diligence process.
       "In arriving at the purchase consideration cognisance was taken of the fact that Rage is currently growing its revenue on a comparative basis to the previous year at c.16% on a like for like basis (excluding new store openings). The purchase consideration will be settled through: &disc; the issue of 270 million Long4Life ordinary shares at a price of R5.50 per share, to the value of R1 485 million. After this share issuance the sellers will hold approximately 22.8% of Long4Life’s entire issued share capital. These consideration shares will be subject to a three-year lock-up period after which the sellers will be entitled to dispose of not more than 1/12 of their Long4Life shares per month on a non-cumulative basis subject to a pre-emptive right in favour of Long4Life; and &disc; the payment of the balance of R2 430 million in cash. The cash portion of the purchase consideration will be funded through a combination of Long4Life’s internal cash resources and bank debt of c.R1 500 million. The Acquisition, which has an effective date of 1 July 2018, is subject to certain suspensive conditions, including: &disc; completion of a due diligence investigation to the satisfaction of Long4Life; &disc; approval by the relevant competition authorities; &disc; service and restraint agreements being entered into between Long4Life and certain members of the Rage management team; and &disc; other suspensive conditions that are standard for a transaction of this nature."

 

 

Footwear sector: No settlement yet

Durban (SA) – The parties to the footwear sector of the National Bargaining Council of the Leather Industry were unable to reach agreement on Thursday last week at a conciliation meeting presided over by a CCMA commissioner.
        NBC general secretary Gerald Naidoo said SAFLIA had put an offer of settlement to both unions of a 6.25% wage increase and an offer to expand the scope of entitlement of family responsibility leave to include incidents where the spouse of a worker has been hospitalised.
       He said SAFLIA's offer had been rejected by both unions, but would remain on the table until July 6.

 

Bounty to retain Levi's flagship stores

Johannesburg (SA) – Laurence Slotsky of 1721 Distributors would like to clarify that his company has taken over Levi's footwear, not the Levi's retail flagship stores that Bounty Brands will retain.

 

 

USAID punts East African shoe industry

The USAID East Africa Trade & Investment Hub represented 9 East African footwear companies at the Fashion Footwear of New York’s “Market Week” in New York last week, according to its newsletter. "The companies’ new collections generated significant interest among retail buyers, leading to 20 potential linkages valued at $1,347,000. All of the companies are based in Kenya or Ethiopia where footwear industries have invested heavily in their leather sector and in their production capabilities, with USAID support."

 

They Said It

"I 'm semi retired - with a full day job." - Grant Fraser of Claw Boot in response to last week's comment by his son, Mark.

"Do you know something we don’t? I checked this morning and John is still turning up at Little Slipper every morning even at the ripe young age of 70!!!" - Jacky Hay of the Little Slipper Company on our error last week, listing John Ashworth as formerly with the company. Red-faced apologies to all concerned.

 

 

Exchange rates

Source: http://www.x-rates.com/calculator/

 
  Euro € GBP £ US $ Yuan Renminbi ¥
11/12/2017 R15.82 R17.99 R13.40 R2.03
05/01/2018 R14.86 R16.69 R12.33 R1.90
13/01/2018 R15.14 R17.03 R12.41 R1.92
22/01/2018 R14.76 R16.75 R12.08 R1.88
26/01/2018 R14.74 R16.79 R11.86 R1.87
05/02/2018 R14.96 R16.89 R12.02 R1.91
12/02/2018 R14.64 R16.51 R11.95 R1.88
16/02/2018 R14.43 R16.30 R11.63 R1.83
23/02/2018 R14.19 R16.12 R11.54 R1.82
05/03/2018 R14.60 R16.39 R11.85 R1.86
12/03/2018 R14.58 R16.43 R11.82 R1.86
16/03/2018 R14.72 R16.70 R11.97 R1.89
23/03/2018 R14.53 R16.60 R11.75 R1.86
03/03/2018 R14.58 R16.62 R11.83 R1.88
11/04/2018 R14.75 R16.91 R11.93 R1.90
16/04/2018 R14.89 R17.23 R12.04 R1.91
23/04/2018 R14.99 R17.11 R12.27 R1.94
30/04/2018 R15.06 R17.16 R12.47 R1.96
07/05/2018 R14.96 R16.98 R12.55 R1.97
14/05/2018 R14.60 R16.54 R12.21 R1.92
22/05/2018 R14.84 R16.92 R12.61 R1.97
28/05/2018 R14.47 R16.55 R12.43 R1.94
04/06/2018 R14.70 R16.78 R12.54 R1.95
11/06/2018 R15.46 R17.55 R13.10 R2.04
18/06/2018 R15.63 R17.83 R13.45 R2.09
25/06/2018 R15.89 R18.05 R13.60 R2.07
02/07/2018 R16.10 R18.18 R13.87 R2.08

 

 

 

02/07/1949: Maria Augusta Craveiro, Goosie’s, Ladybrand.
02/07/1959: Leo Greef, formerly Southern Hemisphere Trading Trust, Uitenhage.
02/07/1971: Rajeev Matai, Mantella Q Leather, Pinetown.
02/07/1971: Suritha Naicker, Ethekwini Leather, Durban.
03/07/1971: Steven Coetser, Safety Smart, Pinetown.
03/07/1949: Pieter Coetzee, Assegaay Bosch Ranch, Van Wyksdorp.
04/07/1952: Eddie Lahee, Shoeperama, Durban.
04/07/1956: Warren Wareing, Island Style, Durban.
04/07/1967: Martin MacGregor, Bay Solutions, Port Elizabeth.
05/07/1941: Judy Powell, retired, formerly Footwork, Trafalgar.
06/07/1974: Gary Gilder, Bolton Footwear, Cape Town.
07/07/1955: John Kotze, Designer Marketing Int. Johannesburg.
07/07/1959: Lenette van Vuuren, Incredible Shoes, Ladysmith.
08/07/1950: Sam Muller, BEC Safety, Port Elizabeth.

 

In Memoriam this week

02/07/1997: Clemente Villani, Villani Shoes, Johannesburg.
02/07/2010: Justin McCarthy (b. 29/01/1958), Groundcover, Curry’s Post.
04/07/2010: Kasieprasad Pattundeen (b. 29/12/1924), Palm Footwear, Durban.
05/07/1999: Norman Berrill, freelance designer, Durban.
06/07/1996: Eric Waterworth, King Tanning Company [closed], Pietermaritzburg.
07/07/1993: Rob Scallan, Tuftex, Port Elizabeth.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

 

ABSA Agri Trends 29/06: Hides & skins prices

Overall, the hide market sentiment remains bearish, in line with the weak international hide market. Shipments to Italy are expected to be limited as well, weighing on the market. There are also indications of oversupply in South America which further add pressure on the market. The average hide price over the past week was R7.13/kg green. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. The average price for Dorper skins was R32.78, and for Merino skins was R86.50.

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
14/02 14.65 47.33 95.29
15/03 14.25 39.30 78.75
24/03 14.13 45.27 94.45
28/03 14.07 45.27 94.45
04/04 14.83 41.92 87.58
11/04 14.68 41.92 84.12
19/04 14.77 43.85 92.32
25/04 14.75 41.25 92.27
04/05 14.79 43.33 92.69
10/05 14.75 40.50 88.41
16/05 14.58 40.83 90.96
31/05 14.62 40.50 87.95
09/06 14.58 41.82 96.35
23/06 14.40 40.42 101.25
29/06 14.30 41.36 98.44
07/07 14.33 43.33 100.94
13/07 14.37 44.44 114.58
28/07 14.14 43.64 97.50
04/08 14.16 43.69 99.64
14/08 14.08 38.99 92.75
18/08 13.70 43.18 98.96
25/08 13.93 43.75 100.96
01/09 13.14 44.09 101.25
08/09 12.88 41.82 100.83
21/09 12.64    
03/10 12.50    
11/10 12.52    
20/10 12.23 39.30 110.23
27/10 12.12 37.30 94.32
02/11 12.19    
10/11 12.24 37.00 101.75
30/11 11.82 32.56 94.25
07/12 11.76 35.50 92.50
14/12 11.53 35.50 91.86
02/02 10.39 32.50 92.22
09/02 10.17 33.13 91.27
16/02 9.94 32.50 88.26
16/02 9.94 32.50 88.26
16/03 9.62 33.75 90.50
23/03 9.56 32.22 87.63
06/04 8.86 36.67 82.50
13/04 8.98 35.00 81.25
23/04 8.40 35.13 86.00
26/04 8.18 34.13 86.11
07/05 7.89 33.33 83.13
18/05 7.71 33.50 82.22
25/05 7.78 31.38 86.06
01/06 7.74 30.71 95.89
08/06 7.43 31.67 87.50
15/06 7.67 32.11 87.40
22/06 7.60 32.50 86.70

 

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

  


Classified Adverts

AGENCIES REQUIRED FOR KWAZULU/NATAL

Experienced well-established agents are seeking additional lines in Apparel and Footwear.
We have superb centrally situated showrooms and have years of experience in both Wholesale and Retail.


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Mike Samuel   0824477110      031-3127065    samuel@iafrica.com
Yasin Ally    0837295136      031-3127531    yasinally786@gmail.com




In need of a boardroom?

SAFLEC, situated at 6 Stedman Mews, 128 Jan Hofmeyr Road, Westville, has a boardroom for hire.
       It seats up to 12 people around a table, and has space to add up to 15 more chairs in the room. You are welcome to view the room before hiring.
       For more information, please contact Louise on 031 266 1473 or louise@saflec.co.za.
We look forward to being of service.




  

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

Next newsletter: July 9, 2018.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

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