South African & East African Footwear and Leather Goods, Leather and PPE industry news.
Mr Price denies interest in acquiring Jet
Durban, KZN, SA (May 28, 2020) – As a follow up to provide clarity on the Group’s circular and SENS announcement of 20 May 2020 regarding a general meeting for authority to affect a specific issue of shares of up to 10% of the Group’s issued ordinary share capital (“Equity Raise”), the Group advises as follows.
The purpose of the Equity Raise is to ask shareholders to lend support to fund long-term growth in anticipation of value accretive assets at attractive valuations becoming available in the current economic environment; as well as for organic growth of the existing business and new concepts.
There has been speculation in the market that the Group is pursuing local clothing retail chain “Jet”, a division of Edcon Ltd. (“Edcon”) as a potential acquisition target. The Company wishes to address this speculation and advises that the Group has no intention to acquire Edcon, in part or in whole. The Company’s criteria for a potential acquisition is clear, consistent and demonstratable in its capital allocation track record, which has over time been communicated extensively to shareholders.
The Group’s current cash resources and debt free balance sheet provide adequate support for existing business operations, including potential future disruptions in the medium term as a result of the COVID-19 pandemic.
4IR Contactless commerce and the future post Covid-19
With international travel “out of the question” for the present, footwear manufacturers and retailers are going to have to do substantially more of their pre-production developments online. Companies worldwide are scrambling to adapt to the challenging situation.
FLIC has started to look at not only how we can do more virtual developments but also how to shorten the current pre-production lead times. We have put an interactive pdf file for download onto our website https://flicsa.co.za/ this is just a start and in future, video links etc. will be included.
NCRF: Summer merchandise 'a worry'
Cape Town, W Cape, SA – Different lockdown levels in different parts of the country from the end of May, "could lead to some really odd situations", National Clothing Retail Federation of SA executive director Michael Lawrence said on Friday. "However, [the National Corivavirus Command Council] has given itself more time, this time, to make arrangements."
He said in recommending products to be added to the list that retailers may sell, the NCRF did its own surveys. Now pushing for the inclusion of other leather products like handbags and wallets, he said: "The demand is there. It wasn't an urgent demand, like children's wear, but it's definitely there, and we now want it included, and we've had a lot of support from [trade union] NULAW in our request."
He said what concerned the NCRF most was summer merchandise. "Importing summer clothing isn't yet allowed. If the government thinks that by postponing imports, local manufacturers will be able to fill the void, that isn't feasible. Only 20% of the yarns, and 20% of the fabric used to make clothing in South Africa are locally sourced, and no more than 30% of the clothing sold by retail is locally sourced.
"It will take 4 to 12 weeks to get local factories ready to make summer clothing, and we have no idea what consumer demand will be. I don't believe there will be very high demand for high fashion and high margin clothing, because going to church, eating out and clubbing are all still prohibited, and we don't know how long that will last."
Busby 1: Consumer frenzy
Germiston, Gauteng, SA – On 1 May when retail level 4 was unlocked there was frenzy in the malls. Customers were walking around with 4 to 5 bags of purchases from all retailers, revealing that winter purchases had not yet been made. People were also wanting to get out and so there were many feet in the malls. The results were in line with our forecast.
We have been fortunate enough to have planned well in advance and were prepared with most of the regulatory requirements. The hardest part has been adapting to the new normal.
[The regulations about what we are allowed to sell] have been somewhat confusing, especially for our customers too. Why should they not purchase handbags or open toe sandals or accessories?
Like most retailers we have reflowed product and cancelled on the back end so as to not impact factories negatively.
While we have made contact with our landlords, [rentals over lockdown] are still under discussion. No firm agreements have been reached. We anticipate a positive outcome for all parties. - Mini-chain within the Busby group, men's and women's footwear and clothing
Busby 2: Awaiting clarity on travel
Germiston, Gauteng, SA – Unfortunately under Section/phase 4 of the lockdown restrictions, Frasers stores are not allowed to trade and we are only doing sales through our online channels. When we open - hopefully by Friday we will receive positive news - we will have a clearer view of how the travel restrictions globally, as well as locally, and the lockdown, have affected our part of the retail spectrum. - Medium chain within the Busby group. Luggage and leather goods