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Footwear Industry News

China/DTI offer sports footwear design, technology training

Published: 13th Mar 2017
Author: Tony Dickson - S&V Editor

Pretoria (SA) – The Department of Trade & Industry has arranged with China for 30 South Africans, who are already in the footwear industry, to be trained in sports footwear design and manufacturing technology in China.

The 28-day course will be paid for by the Chinese Government. Successful applicants will need to pay for their own visa cost. For further information, contact Simon Sello Mello at the DTI. - +27 (0)12 394 1175,]

AVI Ltd: Spitz, Green Cross ‘reasonable in difficult environment’

Published: 6th Mar 2017
Author: Tony Dickson - S&V Editor

Johannesburg (SA) – AVI Limited’s unaudited interim results for the 6 months ended December 31, 2016 were released this morning. AVI, which is a fast moving consumer goods group, includes A&D Spitz and Green Cross, along with food and beverages and personal care products. Extracts follow:

        Group overview: Group revenue for the first semester of the financial year increased by 11,6%, from R6,39 billion to R7,13 billion.
        This growth reflects a combination of price increases in response to a weaker Rand exchange rate and higher raw material costs, and volume growth in most of our grocery categories. Gross profit rose by 8,0% to R3,12 billion with the consolidated gross profit margin dropping from 45,3% to 43,8% as some categories have yet to fully recover the input cost pressures resulting from the weaker Rand exchange rate. Operating profit increased by 8,1%, from R1,30 billion to R1,41 billion underpinned by the improvement in gross profit and the containment of selling and administrative expenses. The operating profit margin decreased from 20,4% to 19,7% in line with the pressure on gross profit margins in some categories.

        Footwear and Apparel: The Footwear and Apparel category increased revenue by 4,3% to R1,19 billion while operating profit increased by 1,3% from R305,6 million to R309,6 million. The operating profit margin decreased from 26,9% to 26,1%.
        The Spitz and Kurt Geiger brands grew revenue by 2,8% as a result of higher selling prices offset by lower footwear volumes. Core footwear brands performed well considering the constrained consumer environment, although some consumers found it difficult to absorb the higher prices necessary to address rising, Rand driven, input costs. The gross profit margin was in line with last year underwritten by prudent control of selling and administrative costs. Spitz recorded its best monthly sales in December supporting a reasonable semester in a tough environment. Operating profit increased from R288,6 million to R290,4 million while the operating profit margin for the semester declined from 30,6% to 29,9%.

        Green Cross revenue grew 11,1% to R193,8 million. Retail revenue increased by 17,3% due to price increases in response to the weaker Rand and increased trading space, with one new store opened in addition to the eight new stores opened in the 2016 financial year. Improved assortment and stock replenishment resulted in encouraging retail sales growth notwithstanding the constrained environment. Wholesale revenue declined by 1,9%, reflecting continued volume pressure on this channel as consumers increasingly display a preference to buy higher priced footwear in branded stores. Gross profit margin was maintained despite the weaker Rand, while selling and administrative costs increased in line with the increased number of stores. Operating profit increased from R17,8 million to R18,7 million with encouraging overall progress in the last three months of the semester. – []

DTI to spend R1billion on TCLF industries

Published: 6th Mar 2017
Author: Tony Dickson - S&V Editor

Pretoria (SA) – The Department of Trade & Industry has allocated R1 billion to the textiles, clothing, leather & footwear (TCLF) sector for incentives in its 2017/18 budget, according to Abisha Tembo, chief director, IDD Textiles, Clothing, Leather & Footwear at the DTI. This is out of total incentives budget of R5.5 billion.

        “This is good news for the local manufacturing industry,” said Association of SA Manufacturers of Luggage, Handbags & General Goods chairman Shaun Esson. “We would like to thank all of the people involved at the DTI and the IDC for supporting our industries and for keeping us top of mind at Treasury. These are the types of interventions that allow us to grow and remain competitive.”

        “We hope the footwear industry will get a significant portion of the funding,” said Jirka Vymetal, executive director of the Southern African Footwear & Leather Industries Association (SAFLIA), “and that it will go towards benefitting the industry overall and strengthening areas of structural weakness, such as various categories of components.”

        He also expressed his gratitude to the DTI and the IDC for the continued support.

Kenya seeks to grow footwear SMEs

Published: 6th Mar 2017
Author: Yassin Awale; Leather Sector Advisor to the Cabinet Secretary

Nairobi (Kenya) – During the launch of the Kenya Footwear Manufacturers Association 5 year strategic plan (2017-2022) the government continued with its commitment towards the development of the sector by announcing the setting up of a US$1 million pool for the establishment of a revolving fund to provide funds to SMEs at a preferential rate as well as the provision of space to develop clusters across the country, in the 47 Counties.

The Kenya Leather Development Council, in partnership with Kenya Industrial Estates (a government of Kenya parastatal), will develop working space as well as the modalities top provide, monitor and manage the funds. – []

Footwear News Australia closes

Published: 6th Mar 2017
Author: Tony Dickson - S&V Editor

Melbourne (Australia) -  Trade magazine Footwear News Australia has closed after 37 years.

        In a mail to readers, publisher/editor Vicki Hatton, who took over the magazine founded by her father, Bob Grant, blamed declining advertising and subscription revenues and increased printing and distribution costs.

        She is lecturing media and communications at a university and is also working towards a Masters degree in communication. – []

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