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Industry News

South African & East African Footwear and Leather Goods, Leather and PPE industry news.

Fusion Leather/African Gameskin: Extraordinary ideas and opportunities

Published: 22nd May 2020
Author: Denzil Spolander; Fusion Leather MD

Cape Town, W Cape, SA - Lockdown has in some crazy way been a hugely inspirational period for the Fusion Leather and African Gameskin team.

The challenge of new and unknown, sparks energy in my team and leads to extraordinary thinking. 
We are in regular contact with our customers, carving a path for the near future, along with an 18 month strategy. Many of our customers are champing at the bit to get going with new ideas and markets in the online space.
Exports from African Gameskin has been promising over the past 2 weeks and an interesting opportunity with a prominent international brand for Fusion.
Suddenly R18.50 = $1 allows for South African competitiveness.
Fusion has an interesting product offering ex Durban Warehouse in August/September, while African Gameskin launch an Eco Leather range in June.
In the words of Warren Buffet...When the masses are fearful, be greedy and when the masses are greedy, be fearful. My wish is for our industry to find the opportunities that will present in the coming months and pounce.

UNIDO offers free online leather-related courses

Published: 22nd May 2020
Vienna, Austria - The United Nations Industrial Development Organisation (UNIDO), through its ITC SME Trade Academy, is offering 2 free online courses.
In a circular, industrial development officer Ivan Kral wrote:
As in many countries social life and productive activities are on very low level, I would like to draw your attention to online courses available organized by ITC Academy. There are many courses which could be useful for users.
Among others are e.g.:
1. Standards and Technical Requirements for the Leather Industry
2. Fashion Design for International Markets
Courses are free and fully on-line, so very convenient for this challenging time
Standards and technical requirements for the leather industry
Course description
Aimed at senior managers and technical representatives working for leather and leather product producers, this course is designed to showcase the essential standards and technical requirements for export into the major leather world markets. 
Beginning with a description of the importance of standards in the international leather business, it moves on to discuss the demands of major standards and technical requirements, including REACH and ZDHL. Finally, it concludes by presenting guidelines, control measures and testing procedures necessary to comply with these standards, thus helping leather and leather product producers prepare for certification. 
NOTE: We recommend using the latest version of the Chrome or Safari browsers to ensure an optimal experience viewing the lectures.
After completing this course, participants will be able to:
* Establish a consensus around the need to meet international leather production standards;
* Understand the relevant standards and link their requirements to the leather production process; and
* Determine actions to implement quality control measures to comply with standards and technical requirements such as REACH and ZDHL.
Course certification
Participants who meet the course requirements will receive a Certificate of Completion issued in electronic format.
Course structure
Lecture 1: The Importance of Standards in the International Leather Business
Lecture 2: Standards and Leather Production Methods
Lecture 3: The Leather Certification Process
Time required: 4 hours over 2 weeks
Next start date: 27, Jul 2020
Course access: Open for enrolment
Course fee: Free of charge
Fashion design for international markets
Course description
This course explores the fundamentals of product and collection design within the context of the global fashion and textile industry, with a view to helping business owners, production managers and product designers consider these aspects in their product and collection planning for international markets. It explores the uses of colour, texture, and patterns within the context of individual pieces, as well as a collection as a whole in order to guide participants to develop the basic skills required for successful fashion design. 
After completing this course, participants will be able to:
* Articulate the elements involved in creating a strong design vision;
* Apply colour and surface texture design principles; and
* Identify the key steps in product and collection planning.
NOTE: We recommend using the latest version of the Chrome or Safari browsers to ensure an optimal experience viewing the lectures.
Course certification
Participants who meet the course requirements will receive a Certificate of Completion issued in electronic format.
Course structure
Lecture 1: Design Fundamentals for Business
Lecture 2: Colour and Surface Texture in Design
Lecture 3: Product Development Planning
Time required: 4 hours over 2 weeks
Next start date: 03, Aug 2020
Course access: Open for enrolment
Course fee: Free of charge

Restarting retail - 18/5/2020

Published: 18th May 2020
Author: Tony Dickson - S&V Editor
Baxter's: A good start, now back to 'normal'
Vanderbijlpark, Gauteng, SA – The first week was very busy, from Monday to Friday. Now it has slowed down to more-or-less what it was in March.
       Observing the regulations has been straightforward because I don't get lots of people coming to the store at the same time. We've been sanitizing their hands when they arrive, and everyone has been wearing masks. - Salim Tatel, member. Men's outfitter and men's and women's footwear. 1 store.
Bachelors Classic: 'Arrogant' customers a problem
Umhlanga, KZN, SA – This business is situated in a hotel complex, and the hotels haven't yet re-opened. I have, but business has been slow...on one day, I got a customer who spent R7000, but for the next 4 days I sold nothing.
       Following the sanitizing and distancing rules hasn't been difficult, but I have had problems with some arrogant shoppers who behave as if the rules don't apply to them, and I have had to ask them to leave.
       I've had to cancel some orders, which has really upset the suppliers, most of whom are selling imported items and who are taking a hiding. I expect to be in a position to re-order in 3 or 4 months' time, but it's going to be a slow process. - Suresh Parekh, member. Men's outfitter, 1 store.
Crossover: Rentals situation being resolved
Johannesburg, Gauteng, SA – The first week was good, but since then it has slowed down to below the levels of trading in March.
       Fortunately I'm not sitting on a lot of stock, and I haven't had to cancel any orders.
       Also, we have come to an arrangement with almost all our landlords. They've let us off 100% of April rentals, and for May, that varies between 50% and 75%. We're still talking to a couple of them. - Hashim Ismail, member. Mini-chain, 12 stores.

Restarting manufacturing - 18/5/2020

Published: 18th May 2020
Author: Tony Dickson - S&V Editor

We asked a number of manufacturers: Is it now feasible for you to restart general production, or have you already restarted? What is your order position like, and have there been cancellations? Are any of your staff refusing to come back to work for any reason, and if so, what reasons? 4 have so far responded:

The Little Slipper Co: Some great orders
Port Elizabeth, E Cape, SA – We started up production with 25% of the workforce on the 6th of May after ensuring the factory met all the added regulations.
       We had most of the requirements in place prior to lockdown, but had to apply for the permit we require, clean the factory after being closed for so long and finalise the risk assessment.
       The following Monday we moved up to 35% and on the 18th we will run with just under 50% of the workforce.
It has been challenging trying to plan production whilst being restricted on workplace capacity, however we are grateful to be allowed to open again so we can generate an income to pay our staff and the bills.
       We are in a fortunate position to have orders to produce and the Government Gazette allows us to produce all the footwear we make so we are not restricted by seasonality.
       We have had some cancellations and reductions in orders, but have seen some great sales in the first two weeks of retail being back. Long may this continue.
       Overall the majority of staff have been very willing and eager to return to work.
       We do have some staff who are reluctant to return due to health concerns or co-morbidities that do not allow them to.
       Other members of staff cannot return as they have no one to care for their children.
       I believe we have to be as accommodating as possible in these difficult times. - Jacky Hay, COO
Fred Footwear: Cautiously optimistic
Port Elizabeth, E Cape, SA – The current lockdown constraints creates an operational challenge. We are still adjusting to the ‘new norm’. I suspect that an early start (albeit small) would create an opportunity to adjust in an incremental manner, in the context of the ‘new normal’.
            We are currently participants in the Industrial wear/PPE value chain. This sub-sector has been relatively defensive in comparison to the fashion footwear  sector. However, it is uncertain how long this will continue in the post-CV era. Hence, we remain cautiously optimistic.
       We have some employees hesitant to return to work. The rationale is attributable to health/infection concerns of exposure to the Virus, whilst we suspect that some employees are waiting for financial assistance from the Government. - Rolland Eboru, member  
Labora: We'll have to wait and see
Durban, KZN, SA – We've started with 30% of our staff. It's  never a productive environment but sometimes it's important just to keep the wheels turning. It's also unpleasant when you got to only choose 30% of the staff and leave the rest out of it.
       It's tough times but we will survive.
         The next few months are going to be difficult and we have to wait and see how the market reacts to the scaling down of the lockdown. - Desmond Chunderlal, production director 
Dick Whittington Shoes: Summer prices will be a challenge
Durban, KZN, SA – We are only working on essential goods at this time.
       General production is expected to commence by mid-June or even later.
       There is little point in talking about an order position as Winter 2020 is closed for all intents and purposes. We do however have existing orders, either in WIP or unplanned, with a few cancellations. The bigger challenge we face is carrying orders into Summer 2020 at winter prices. The losses are considerable given the ROE and labour cost adjustment effective 1 July.
       I am not aware of staff refusing to come to work yet. - Arveen Boodhoo, MD

Plush takeover approved

Published: 18th May 2020
Author: By Gillian de Gouveia; Competition Tribunal
Pretoria, Gauteng, SA (May 13, 2020) – The Competition Tribunal has unconditionally approved the merger whereby Adcock Ingram Healthcare (Pty) Ltd (Adcock Ingram) will acquire Plush Professional Leather Care (Pty) Ltd (Plush).
       Adcock Ingram is a subsidiary of Adcock Ingram Holdings Limited. The acquiring group is a pharmaceuticals firm that manufactures, markets and distributes healthcare products. Of relevance to the transaction, is the acquiring group’s activity in the manufacture and supply of medical grade sanitisers and surface cleaners.
       Plush is a private company involved in manufacturing and distributing leather care and home cleaning products. Of relevance to the transaction is Plush’s activity in the manufacture and supply of “Plush Supreme” branded sanitisers and surface cleaners for household surfaces.
       The transaction does not present any competition or public interest concerns.
  On March 18, Adcock Ingram said:  Adcock Ingram is pleased to announce that it has concluded a Share Purchase Agreement to acquire 100% of the shares of Plush Professional Leather Care Proprietary Limited ('Plush' or the 'Business') for a confidential purchase price, payable in cash, (the 'Plush Acquisition').
       Plush is a well-established company offering an extensive range of homecare, cleaning and leather care products. Plush products are sold through most major retailers in South Africa and selected Southern African countries. Historically the Business generates revenue in excess of R200 million per annum.
       The Board of directors of Adcock Ingram considers the Plush Acquisition an attractive investment opportunity to enter the homecare category.
       Rationale for the Plush Acquisition:
- The Plush Acquisition is firmly in line with Adcock Ingram’s strategy of diversifying into less regulated product classes in the consumer sector. Further, Plush’s product portfolio has no overlap with Adcock Ingram’s existing portfolio. It will enable the establishment of a homecare business within Adcock Ingram that already has critical mass, allowing us to compete in this category in the Southern African market.
- The Plush brand is well established with strong support and awareness from both retailers and consumers. The brand has excellent potential for further line extensions into adjacent product categories.
- The existing senior management team, who are also the exiting shareholders of Plush, have been a crucial component of Plush’s success and continued growth over the last 10 years. As part of the transaction, this team has agreed to remain involved with the company for minimum periods of between 12 and 18 months. This will facilitate an orderly and sustainable transition of the Business into the Adcock Ingram group.
       The Plush Acquisition is not a categorized transaction in terms of the JSE Limited Listings Requirements. Accordingly, no shareholder approval is required to conclude this transaction and this announcement is published voluntarily.
       The Plush Acquisition is subject to regulatory and competition authorities approvals and other suspensive conditions typical for a transaction of this nature. A further announcement regarding the implementation of the Plush Acquisition will be made at the appropriate time.
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