Cape Town (SA) – Chic Shoes' shareholders decided last Monday to place the company in voluntary liquidation - the same day we reported that turnaround practitioner JJ Oosthuysen was seeking creditor buy-in for a strategy to trade out of its situation.
       The company will close on Wednesday (January 31).
       "The company had multiple challenges and at the end it proved to be too much," he said. "Business model design is key to the success of any business, especially in the footwear and textiles sector where they face severe competition from low cost imports.
       "Planning for an event or a business strategy implies a certain set of assumptions to be adopted. These assumptions include aspects such as payments to be collected by a certain date, bank balances to be at a certain level, suppliers to release components on credit etc. Once the word is out on the streets that a company is in trouble, everybody pulls back to contain their exposure and risk. These include stakeholders such as customers (supplier failure risk), suppliers (credit risk) and staff (salary risk) etc. Once this happens, everything planned falls flat and alternative plans need to be generated.
       "The reasons for failure relate to the company’s chosen business model that did not deliver the desired profitable business results, meaning, the finance structure and high gearing, the management and governance model, the sales and product distribution model, unprofitable customer base, high input costs (materials and labour), exposure to foreign currency exchange rates, efficiencies on the factory floor, waste management etc all contributed to the failure of the business."
       He said he expected liquidators to be appointed within 2 or 3 weeks.

Cape Town (SA) – The Council for Leather Exports (CLE) India will host its annual trade expo on 21 & 22 February in Cape Town, and it is offering a complimentary economy class return airfare to out-of-town buyers, subject to approval and on a first come first served basis. If you are interested, contact the local show organiser on Tel: 021 790 5849 or Email: nthomas@worldonline.co.za for the criteria. The event will connect leading manufacturers from India with Southern African chain store buyers, independent retailers, importers, manufacturers, agents, distributors and other important industry decision makers. Entry is FREE but pre-registration is necessary. Here is the exhibitor list as it stands currently –
8V Shoes, Mumbai, www.8vshoes.com, Products: Leather sandals
AKI India Ltd., Kanpur, www.groupaki.com, Products: Saddlery Harnesses & Footwear
Aala Gloves, Chennai, www.aalagloves.com, Products: Leather, Leather Gloves and products
Alignz Exports Pvt. Ltd, Noida, www.alignzexports.com, Products: Leather Garments and PU Garments
Council for Leather Exports (CLE), www.leatherindia.org, Sponsored by Ministry of Commerce & Industry, Govt of India
Chowdhary Overseas Limited, Unnao, www.chowdharyoverseas.in, Products: Gents & Ladies Slippers, School Shoes, Sports Shoes, Safety Shoes
Creemos International Limited, Kanpur, Products: Leather belts,  bags and small leather goods
D’Lords Exports (India), Mumbai, www.dlordsexports.com, Products: Men's Footwear
Deepak Impex (Wasan Group), Agra, Products: Men’s and ladies leather footwear
Discovery Leathers Pvt. Ltd, New Delhi, www.discoveryleather.com, Products: Men's & Ladies Leather Garments & Goods 
Flourish Shoes, Kanpur, www.flourish.co.in, Products: Men, ladies and kids leather footwear and accessories
Guru Shoes Tech Pvt. Ltd, Agra, www.valentino.in, Products: Leather & Non Leather Footwear and Accessories for Men & Women
Halcyon Footwears Pvt. Ltd., Chennai, Products: Shoes & Shoe Uppers
Hanna SCM, Chennai, www.hannascm.com, Products: Men's Leather Shoes and Sandals
Hurera Leather Company, Ambur, Products: Finished leather and shoes
I.A. Leather (India) Pvt. Ltd., Kanpur, www.ialeather.com, Products: Leather footwear (ladies, kids and men's sandals, shoes & boots)
Indo Skins Garments Private Ltd, Chennai, www.indoskins.com, Products: Leather Garments, Finished Leather and Leather Goods
J L Collections Pvt Ltd, Mumbai, www.jlcollections.com, Products: Leather Wallets, Gift Sets, Fashion Bags, Travel Bags, Executive Men's Bags and Leather Jackets
Jute Wonders Unlimited, New Delhi, www.jutewonders.com, Products: Leather Sandals
Kailash Forme Creations Pvt. Ltd., Agra, Products: Shoe Lasts & Soles
Kay Shoe Incorporation, Agra, Products: Leather and Non Leather (Synthetic) Footwear
Klodennex, Kanpur, www.klodennex.com, Products: Small leather goods - belts, bags, wallets, etc
Mega Leathers, Ranipet, Products: Finished Cow Leather
N J Exports, Kolkata, www.njexportsindia.com, Products: Finished Leathers
Naaz Leather Finishers, Kanpur, www.naazexports.com, Products: Sandals and Shoes
Osman Shariff, Kolkata, Products: Travel goods, hand bags for ladies, wallets and purses
Pioneer Leather Corporation, Kolkata, www.pilcorp.in, Products: Men's & Ladies Wallets, Ladies Bags, Passport Holders, Key Cases, Other Small Leather Goods
Saktthi Footwear, Chennai, Products: Leather Shoe Uppers & Leather Hand Bags
Siddharth Footwear Exports Pvt. Ltd, Noida, Products: Men's & Ladies Leather Shoes and Boots
Stallion Animal Products, Kanpur, Products: Finished Leather, Industrial Shoe Uppers and Shoes
Super Footwear, Kanpur, Products: Leather Slippers and Sandals
Super Shoes Limited, Kanpur, www.supershoes.co.in, Products: Leather Footwear
Super Tannery Limited, Kanpur, www.supertannery.com, Products: Leather Shoes
Tannex International, Kolkata, www.tannexinternational.com, Products: Leather products - ladies bags, wallets, portfolios, rucksacks, handbags, belts, accessories, etc.
Torero Corporation Private Limited, Kolkata, www.torerocorp.com, Products: Leather Bags, Leather Wallets, Leather Belts, Luggage, Back-packs, Leather Key Rings and Accessories
Trendsetter, New Delhi, Products: Leather garments, bags, wallets
Usmani Tanners, Kanpur, Products: Leather Belts
Wallets Plus, Kolkata, www.walletsplus.net, Products: Handbags & Wallets

To attend, visit www.urexpo.com and complete the online registration form.  Colleagues and business associates are welcome to attend but please note, this is a business exhibition and no persons under 18 will be admitted.

Cape Town (SA) – Leather women's footwear manufacturer Chic Shoes has ceased production while the turnaround practitioner seeks an accommodation with trade creditors and a buyer for the business.
       In a circular to trade creditors on January 15, JJ Oosthuysen of GO-Hi Consulting, who is also interim CEO of Chic Shoes Manufacturing (Pty) Ltd, urged creditors to accept a plan to sell finished stock and non-returnable components, return unused components where possible, and sell the business as a going concern rather than liquidating it.
       He said it was preferable to "avoid formal liquidation procedures", and instead to seek a "co-ordinated short-term solution" to supplier debt, which would include a formula to pay creditors in accordance with their percentage of total supply chain debt.
       He said the proposal required major creditors to halt collection procedures and for the Industrial Development Corporation, the largest creditor - and which would not be part of the payout plan - to accept it. The goal is to find a buyer by March 1.
       Chic has components worth over R3 million, and 14 000 pairs of shoes, boots, sandals and pumps which he estimated could fetch R2.5 million at "promotional prices".
       Chic's liabilities were not listed in the report.
       The factory stopped production on December 15. It reopened on January 11, but only with staff required to assist the practitioner.

Today the USAID Hub and the Kenya Ministry of Industry, Trade and Cooperatives joined Kenya’s private sector to review and validate a new Kenya National African Growth and Opportunity Act (AGOA) Strategy. Since 2010, Kenya has nearly doubled its exports to the U.S. under AGOA, from $225 million to $389 million in 2016. The new National AGOA Strategy outlines updated priority actions for Kenya to diversify its export portfolio with the goal of doubling the value exports to the U.S. under AGOA by 2025.
       The new strategy is the result of a supply-side and end-market analysis provided by the USAID Hub at the invitation of the Government of Kenya. The USAID Hub worked closely with government officials and the private sector to perform its analysis which included a series of stakeholder engagement workshops by sector.
The U.S. Government remains committed to contributing to Kenya’s economic growth. Duty-free access through AGOA supports Kenya’s efforts to bolster industrialization, create jobs and achieve economic prosperity. The apparel sector under AGOA is the largest contributor to job creation in Kenya currently credited with supporting over 200,000 full-time jobs. It is also Kenya’s highest earning sector, accounting for 85% of its $389 million in 2016 AGOA exports.
       The USAID Hub is also working with the Kenya Ministry of Industry, Trade and Cooperatives on a “East Africa Cotton, Textile and Apparel Workforce Development Initiative,” a collaborative effort with the private sector based on a partnership agreement between the USAID Hub and the American Apparel and Footwear Association. The partnership ensures U.S. brands and retailers’ goods are manufactured in accordance with best-in-class business practices and operations in East Africa, producing a win-win for trading partners. As part of that initiative, in July 2017 the USAID Hub signed a grant with Generation Program Kenya Limited, a local subsidiary of the McKinsey Social Initiative, to create 2,000 full-time jobs and provide over 100,000 hours in skills development for young people in the apparel industry.

The investigation by German police into Steinhoff International Holdings NV ended negotiations in December by its Steinhoff Africa Retail subsidiary to take over another SA-based footwear chain, according to a source. No comment was available from either side last week.
       Reports in various financial media have suggested that the immediate problem facing all Steinhoff subsidiaries is access to operating capital, irrespective of their underlying strength.
       Steinhoff Africa Retail - the Star Group - includes apparel chains Ackermans, Dunns, John Craig, Pep, Pep Africa, Refinery, Shoe City and Tekkie Town, along with furniture, hardware, household goods, IT and music chains. It was listed on the Johannesburg Stock Exchange last September when Steinhoff International sold 23.19% of the shares for R16 billion.
       A request to Ian Nel of investor relations at the Star Group's head office for comment on the future of Steinhoff's apparel businesses, locally and internationally, was referred to investor relations at Steinhoff International. An unsigned reply read: "Please be advised that the information you request may be price sensitive and cannot be supplied unless it is published on SENS", and referred enquiries to http://www.steinhoffinternational.com/sens.php.
       A release on that site dated January 4 and headlined 'Steinhoff liquidity update and management board changes' included this statement:
Liquidity update: The interaction with Steinhoff’s global banking and financing partners following the meetings with lenders in London on 19 December 2017 and with South African lenders on the 21st of December are ongoing. While the Group has achieved some degree of stabilisation in its operating businesses, significant near-term liquidity is still required in certain of the business units. The Supervisory and Management Boards of the Company remain committed to work with its lenders and other finance providers in finding solutions and to return liquidity to the Group in order to stabilise the affected underlying operations and will update the market in due course.