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Footwear Industry News

Shoeperama in business rescue

Published: 18th May 2020
Author: Tony Dickson - S&V Editor
Durban, KZN, SA – Mini-chain Dened cc, which trades as Shoeperama, was placed in Business Rescue on March 19, according to a circular last week from business rescue practitioner Neil Button of Stowell Estate Administration Trust in Pietermaritzburg.
       Commenting to the Newsletter last October, Dened member Eddie Lahee said the business had shrunk from 23 to 9 stores because of poor trading conditions.
       In his circular, Button wrote: "In light of the lockdown...the CIPC had suspended business rescue practices from 24 March to 30 April 2020...In light of the above, the business rescue practitioner was unable to adhere to the statutory time limits within which to convene meetings of creditors and employees." He wrote that a further notice would be communicated "shortly".

Herman Alheit...Fined for lockdown \'violation\'.

SAPS raid \\\'a lack of understanding\\\'

Published: 13th May 2020
Author: Arveen Boodhoo
Dick Whittington Shoes, deemed an essential supplier because it makes government tender footwear, was raided by the police during 'Level 5' of the lockdown, for a suspected violation of lockdown rules. The rumour mills suggested MD Arveen Boodhoo and production manager Herman Alheit were arrested. Here the MD explains what happened.
 
Pietermaritzburg, KZN, SA - No such thing happened to Herman or I.
But yes we had an welcome visit from SAPS. 
Rumour has it that it was a tip off by labour.
As you know, our closing room is automated. The closing room operators were completing in process work on the conveyors left at lockdown to make way for army boots. This was done to facilitate the work flow because the clicking department were cutting the uppers and linings of the boots to feed into the closing room.  
SAPS deemed this to be in violation of lockdown rules due to the fact that the closing room was working on non-essential goods. 
As a result employees were dismissed, Herman as factory manager was charged and R5k fine was levied. Neither of us were put in orange overalls. 
Not so interesting I guess but somewhat juvenile and a lack of understanding of process flow by SAPS.

Covid-19: More DTIC notifications

Published: 11th May 2020
Author: Tony Dickson - S&V Editor

Pretoria, Gauteng, SA – Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), last week forwarded this announcement. Dr Irkhede's contact details are +27 (0)66 301 2044, jirkhede@thedti.gov.za.
COVID-19 GUARANTEED LOAN SCHEME FOR SMALL AND MEDIUM ENTERPRISES
As announced by the President, National Treasury, the South African Reserve Bank and commercial banks have jointly created a guaranteed loan scheme. The purpose of this scheme is to help small and medium-sized businesses and the economy. In terms of this scheme, R200 billion will be ultimately made available for new loans to existing customers. The initial phase will be R100 billion.
       The key features of the Covid-19 loan guarantee scheme are:
1. Covid-19 loans will be available from banks to eligible businesses in good standing with their commercial banks with an annual turnover of less than R300 million.
2. Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements, contracts with suppliers, etc. Loans will cover up to three months of operational costs and will be drawn down monthly.
3. Banks are not obliged to extend Covid-19 loans, and those that do will use their normal risk evaluation and credit-application processes. A business’ owners may be required to sign surety for the loan.
4. Each business may accept only one Covid-19 loan.
5. Covid-19 loans will be offered at a single, agreed lending rate by all banks participating in the scheme. The rate will track the repo rate.
6. A six-month repayment holiday will commence from the first drawdown, although interest will accumulate from the date on which the first drawdown on the loan occurs.
7. Repayment of interest and capital starts after six months and businesses have a maximum of 60 months to do so. Borrowers can repay the loan ahead of schedule.
8. The scheme will be rolled out by banks over the next few weeks.
       The scheme works on the principle that profits and losses are ultimately shared between government and the banks. The scheme will receive all ‘profits’ on the loans, i.e. the difference between the rate at which banks lend the money (together with limited costs). This will include a guarantee fee charged to the banks in relation to the scheme. These profits will be used to offset any losses that the scheme makes. If the scheme suffers any further losses, these will be absorbed by the banks themselves, capped at 6 per cent of the size of the loan. Any further losses will ultimately be covered by the fiscus.
       Please contact your bank for further details and eligibility criteria.

Restarting retail - 11/5/2020

Published: 11th May 2020
Author: Tony Dickson - S&V Editor
A.P. Jones: A slow trickle, and glad of it
Fish Hoek, W Cape, SA – It has been a slow trickle since last Saturday. We are extremely fortunate in that we do have a slow trickle. There are so many businesses out there who have not been able to open and we feel for them. I think that it is all going to be about expectation (or the lack of it!). The further we have gone from month-end and the initial euphoria, the slower the trickle has become.
       Naturally, the CIPC Certificate had to be downloaded. Our staff are all questioned on their health (with specific reference to the Corona Virus) on arrival and then tested with a thermometer for their temperatures. Education regarding social distances between both other staff as well as from customers was vital. We closed one of our two entrances for ease of monitoring and people are asked to sanitize as they enter. So far, we have not been busy enough to request customers to queue outside of the store. Staff lunchtimes and tea times have had to be staggered. All goods that have been tried on are steamed and kept aside for a period of time. The counters at the till point are sanitized after every sale. Our public toilets have had to be closed for the short term. All staff have to wear masks and customers who arrive without have the option to buy a disposable mask for R20, or we are not in a position to allow them to enter the store. We have had to apply a "no returns" policy with regards to all purchases. - Greg Bing, member
 
 
 
The Athlete's Foot: Better than expected
Cape Town, W Cape, SA – March saw a big decline even before lockdown as fewer people came into the centre. The year ahead is bleak as the Waterfront depends heavily on tourists.
       Our reputation as a  specialist in sports footwear helped to bring customers in and we are trading at a substantially higher level than anticipated, albeit on a much lower level than last May.
       At least we can pay the reduced rental landlords have offered and more importantly our staff.
       I would be extremely happy if we can achieve 50% of last year’s turnovers but that means probably just breaking even – there won’t be any tourists in Cape Town till next year!
       After all these years in retail, I have some reserves, but I fear for some of the smaller guys, some of whom used to work for The Athletes Foot. - Barry Selby, member
 
 
 
Ginger Bhagwandas: Demand for sandals
Durban, KZN, SA – Trade was brisk until Thursday the 7 th of May 2020 . Friday and Saturday has been quiet.
       We first opened 2 stores and thereafter opening the other stores gradually.
       We only allowing few customers into our stores to maintain social distancing. We are maintaining strict controls under rules of stage 4 lockdown. Customers are demanding sandals and shorts however this is prohibited.
       Retailers are concerned about trade going forward . It’s about survival at the moment. - Sunil Bhagwandas, member
 
 
 
Louis Shoes: Much better than expected
Cape Town, W Cape, SA – Before I comment on how retail has been for the last week, since returning to work from over a month’s quarantine/lockdown, I just want to say how sorry I am for all the other retail sectors that are still not allowed to trade during level-4 lockdown – restaurants / fast-foods / hairdressers & beauty salons / liquor stores / cigarette vendors / luggage and bags and many more that are not considered “essential items” under level-4 quarantine. And I hope and pray that they will all be allowed to start trading again very, very soon.
       When we returned to work and opened our shop again on Friday the 1st of May we were very nervous and not sure of what to expect – we did not know whether we needed a permit to return to work – we did not know where to buy hand sanitizers / masks and face shields for ourselves and for our staff or even how many people were allowed inside our store at one time. Nevertheless we opened not knowing what to expect and soon found out where to buy all the Personal Protective Equipment (PPE). If another retail store had a sensible policy or sign on their store we copied them. Every day has been and still is a new learning curve of how to trade during a virus pandemic – from making sure every customer entering the store wears a protective mask and sprays their hands with sanitizer – to learning new rules and regulations from everyone around us - like  having my father phone me one night to tell me that he heard on the radio that change rooms are not allowed to be used and no trying on or returns of clothing are allowed - to having my staff tell me that Pep stores are not even allowing the fitting on of shoes.
         Nevertheless customers returned and there was a very joyous overall mood – people were happy just to be allowed out again.
         We were not sure if we would do any business at all and were worried that customers would not have any money left to buy “non-essential” items like shoes and clothing - we were happily surprised and have, so far, traded as normal with similar turnovers to last year's first week of May. - Steven Neimann, member

Restarting manufacturing and retail: Details expected this week

Published: 27th Apr 2020
Author: Tony Dickson - S&V Editor

Cape Town, W Cape, SA – Following the announcement that the manufacture and retail of 'winter clothing' will be allowed from May 1, a Government Gazette spelling out the conditions is expected to be published this week.
       "We're busy writing a lot of motivations and product lists which have to be with the government by midday tomorrow [today]," National Clothing Retail Federation of SA executive director Michael Lawrence said yesterday. "The lists include footwear. We've been very specific about the categories."
       He said the NCRF had also asked for time ahead of the scheduled re-opening to be able to "tidy up our stores", and to train staff and install any equipment required to comply with regulations.
       "I suspect the government has already written the notification, and is just waiting to finalise details. They've set the date. They must make it happen, somehow."
       He said retailers were welcome to contact him. (+27 (0)82 496 0126, michaell@ncrf.org)
       On the manufacturing side, Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), asked all manufacturers' associations in the leather industry to submit proposals to the DTIC: "We will appreciate if all six sub-sector associations (SAFLIA, SHALC, SAOBC, SACIA, SATTA and GGBB&LEA) can submit their proposal in favour of how the industry in their sub-sector would like to operate during Alert Level 4 by 27th April 2020. We would like to urgently feed all proposals to the DTIC Chief Economist by close of 27th April 2020. We have already received an official draft proposal today from Ernest Heunis of SHALC on behalf of Skins & Hides sub-sector for all tanneries to be allowed to operate under Alert Level 4 and it be gazetted under new regulation."
       One manufacturer said of the recommended preventative measures and procedures for manufacturers produced by FLIC and published in last week's newsletter: "If you look at the list of things your staff and factory have to now comply with, I feel first of all they will battle to work productively and secondly with the expense will it be worth opening?" [Note: FLIC's list was of recommendations, not regulations]
       Said SAFLIA director Jirka Vymetal: "The little I do know is that working conditions will be very strict under COVID conditions, so most of what FLIC state will probably be a requirement. So yes, going forward there will be huge additional expenses for a factory to commence and carry on working."
           So far, leather goods haven't been mentioned in the re-opening dialogue. Said Equator - the Belt Factory™ director Leon Buhr: "Winter shoes might manage to get into that definition [winter clothing], but I doubt belts or bags can make a case to be included as winter clothing at Level 4. Although you do need a belt to hold up your corduroys.... I have lowered my expectations to zero so whatever happens I can only be surprised on the upside. We fully support the extensive safety protocols in work-places and factories and had already implemented many of these soon after 4 March, and are readying for a very stringent environment at the workplace as thinking and suggestions around this evolve. At the end of the day, whether we can re-open now or later, everything depends on consumer demand. Nothing else matters really, does it?"

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