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Industry News

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

Parktown Stores: Stock shortages a big issue

Published: 28th Dec 2020
Author: Tony Dickson - S&V Editor

Ziyaad Docrat, proprietor of online and 1 store family outfitter Parktown Stores, said overall sales have been down on last year, but with some better performing sectors.
      "Back-to-school is important for us, but this year it isn't what it should be because of the uncertainty.
      "Normal casual wear is doing quite well, probably because people are travelling less and have more to spend.
      "Weddings and other formal occasions were cancelled or postponed - there's a trickle of formal wear sales now."
      Outdoor wear is an important sector for Parktown in the May to August hunting season, which was affected by lockdown regulations. December sales of those products were probably presents, he said.
      He said stock shortages were a significant factor. "Most suppliers don't have stock, and many smaller retailers have run out of stock - or shut down. We're not importing at the moment - one shipment took a year from ordering to arrival, and it's chaotic. Suppliers are trying to source locally or from Lesotho.
      "These are very uncertain times."

Durban cobbler to close shop after 99 years

Published: 28th Dec 2020
Author: By Janine Moodley; The Post

By Janine Moodley, The Post,  Dec 23, 2020
Durban, Gauteng – It is an end of an era for a Durban shoe repair shop that will close after 99 years of being in business.
      Natvai 'Bhikhoo' Harie, a third-generation owner of HD Kalidas & Co in the Durban CBD, said it was a tough decision to make but he believed it was the right time to retire.
      Harie, now 79, said the business was named after his grandfather and his grandfather's brother.
      His grandfather's name was Haribhai and his uncle Dhanjeebhai. Their surname was Kalidas. Harie used his father’s first name as his surname.
      "My grandfather came from India as a shoe repairman. He opened HD Kalidas Shoe Repairs in 1922 opposite the Grey Street Mosque."
      Harie's father, who was a teenager, then arrived from India and joined the business in 1946.
      Harie, the eldest of nine siblings, said he completed high school in 1961 and studied medicine for three years.
      "In my third year, when I was 25, my dad fell ill, and I had to leave varsity to run the business. I have been running it ever since."
      Harie, of Reservoir Hills, said after 70 years in Grey Street, the business relocated to Queen Street in February 1992. At that stage, the business started selling shoes.
      "It was a bigger shop, and we did family footwear and repairs. This worked out well for us."
      In 2008, due to his age, Harie decided to downsize and moved to another shop in the same building.
      "I decided to do shoe and bag repairs. I had become known as 'the specialist shop' and had built loyal customers. They had confidence in me, and they were from areas including northern Zululand, the south coast, and even Pietermaritzburg."
      He said the most expensive shoe he repaired was R12 000.
      The business operated from Monday to Saturday, and his wife, Usha, helped out when she could.
Harie said the CBD had changed and was now crowded, dangerous, dirty and unsafe.
      "Back in the day, we could walk in town even after 5pm, but over the past 20 years, it has deteriorated. There have been numerous robberies, especially in Queen Street. I was robbed four times at gunpoint. I was a bit fearful, but I had a passion for what I did, and it was too early to retire.
      "Now, having to leave my clients is definitely heartbreaking, but I have to do what's best for me and my family. Usha and I both decided that I would retire at 80 to spend time with our children and grandchildren."
      He said his three daughters were also concerned about his health and safety, especially at his age, and they wanted him to call it a day.
      The couple contracted Covid-19 in July, and the shop was closed for two months.
      "The time away from work made us realise that our health was of paramount importance."
      He said he thought of passing the business to his daughters, but they were busy with their careers and that to teach the trade someone new, would take years.
      The business will officially close in mid-January. - https://www.iol.co.za/thepost/community-news/durban-cobbler-to-close-shop-after-99-years

NCRF: All products can be sold, summer imports allowed, but lessons will have to be learnt

Published: 1st Jun 2020
Author: Tony Dickson - S&V Editor

Cape Town, W Cape, SA – Any apparel retailer can sell any item of apparel, all apparel retailers are allowed to have all members of staff at work, and the only restrictions now are hygiene - masks, sanitizers and social distancing. That's the situation as of today as far as the National Clothing Retailers' Federation understands it, executive director Michael Lawrence said on Friday.
       Also, the import of summer merchandise is allowed, he said.
       "As far as the regulations for retailers is concerned, there's no 'one size fits all'," he said. "Having all your staff at work, for example, may reduce the number of customers you can allow in at a time, because there's a mathematical formula, based on a retailer's floor space, which determines how many people may be in a store at a time.
       "We'll be learning a great deal over the next few weeks. Apparel shopping is normally unstructured, and people like to look around. Now, retailers will need to try to get them in and out as quickly as possible, but still make the sale, which will make the positioning of products very important. Consumers will have to get used to new ways of shopping.
       "I don't know the answer to fitting and returns. Clothing stores aren't obliged, by law, to allow people to try on items. In terms of the Consumer Protection Act, returns are allowed. But both of these are areas where there is potential for infection. Individual retailers will have to work this out for themselves."
       He said retailers had been asked to stagger opening and closing times to reduce customer numbers. "It could work quite nicely," he said, "but there are issues - overtime hours for staff, for example, and the safety and security of staff and customers being out or on public transport outside of normal shopping hours."
       He said the import of all apparel was allowed, although "the Minister may make rulings from time to time".
       A concern was that with the backlog of containers to be cleared from ports, checking would be less stringent, and illegal imports could increase significantly.

Euro Industrials: For the industry to recover, we all have to do 'the right thing'

Published: 1st Jun 2020
Author: Sergio Guerrera

Westmead, KZN, SA – We, as all non-essential businesses, had to close our doors on the 26th of March. We continued to work from home but in reality, as we are a manufacturing concern, all we really did was apply for TERS, Saft and the SMME Finance Relief Fund. The TERS was a nightmare to apply for as different formats were required and then 2 weeks into the application process it changed and we had to re-submit. We did, however, receive the correct payout with the payment schedule in the last week of April. TERS for May opened on the 28th of May and we have lodged our claim.
       Saft was straightforward and our staff are receiving their weekly amounts. The SMME FRF only sent through a communication this week telling us that we must apply to TERS for our wage bill expenses but no mention of any relief mechanisms for fixed operating costs such as rent etc which, as I understand it, is what the fund has been set up for.
       Two of us returned to work on the 4th of May to assess our position and plan a way forward. We contacted every customer to ascertain their position as well as get an update as to their order requirements. A number of customers cancelled orders, some reduced the quantities and/or pushed the delivery dates back. At least 60% of our customers are still not operational.
       What is very frustrating is the lack of communication from a number of customers, many of them well established enterprises. There has been no or little feedback on WIP order requirements, payment of outstanding accounts - many don’t reply to emails or return phone calls.
       We also proceeded with an aggressive cost reduction strategy to contain and reduce any overheads that are not directly related to manufacturing. We foresee some very lean months ahead and in order to try to survive, we cannot carry any expenses that don’t assist in the generation of income. Due to non-payment from most of our debtors for April and May - as well as some from February and March - we have not been able to cover most of our commitments to our creditors for April and May. I contacted each supplier personally to explain our position. Most are understanding but we are on a COD basis until we can bring our accounts up to date.
       We approached our landlord, ITHALA, prior to lockdown to discuss options for assistance as we knew that we would be very negatively affected by the lockdown and subsequently reduced turnovers. We have not generated any turnover since the 26th of March. We have not legally been allowed access to our premises since the 26th of March. Although we were allowed back from the 4th of May, running with 30% of our staff is not feasible for our particular production process.
       I put forward some proposals to the landlord and we were finally informed last week that we could take a payment holiday for April, May and June and cover the shortfall over the next 6 months in equal payments. As much as I understand that an agreed rental amount is in place and that the property rental business, like any other business, has expenses, it needs to meet halfway if your customer has had no income and their reserves are low -which is the case for many SMMEs. Surely commonsense will dictate that one cannot pay without funds available? Nor in this current climate can an astute landlord expect to find a replacement tenant at the drop of a hat. Rather negotiate with the existing tenant to achieve a cost effective compromise?
       We are only at the beginning of this catastrophe in terms of damage to our economy, as well as infection and death rates. This is the time for us to work together to save as many businesses, jobs and lives as possible. This is also an opportunity for us to change our economy in terms of localised production. Far too many retailers import large percentages of their stock. This is short-sighted and they are merely chasing short term profit. Who do they expect their customers will be if our unemployment rate tops 50%? It may explain why so many of them have and are pursuing opportunities outside our borders.
       That said, I fear that it may be too late for a number of industries who, over that last 20 years, have been decimated by imports. What manufacturing capacity is left?
       While I don’t share many of President Trump's ethics and viewpoints, I do resonate with his call to “put your country first”. Not to the detriment of others, but look after your own first. Globalisation in some ways has become a way of chasing cheap labour in countries and regions that don’t always meet the OHS and remuneration standards of the region that the products are sold in.
       Many companies seem to have double standards - one set for their “corporate face” and another for their business model. Doing the right thing cannot only apply to your employees. Doing the right thing means ensuring that your suppliers are working to your and your customers' standards. Locally a number of manufacturers use CMT shops avoid paying their particular sector's wage rates and levies, etc.
       Life is going to be tough and challenging in the months and years to come. We have an opportunity to make a difference to the lives of many South Africans if we choose to look after own first and do the right thing.

Truworths: Business update and trading statement (May 25, 2020)

Published: 1st Jun 2020
Author: Stock Exchange News Service (SENS)

- Future of UK Office chain on the line
- Group may record a loss for the year
Cape Town, W Cape, SA (May 25, 2020)  – The outbreak of the COVID-19 virus and its declaration as a worldwide pandemic has had a significant impact on the businesses which the Group operates, especially the requirement to close all retail store premises in all countries of operation during lockdown periods, some of which remain in force.
       Management of the Group has been actively engaged in executing operational steps and various strategic responses to best mitigate the impacts of this unprecedented and continuously evolving situation.
       With Group revenues reduced materially whilst stores were required to remain closed, the Group’s primary financial objective has been to curtail expenditure and preserve cash.
       The COVID-19 lockdown has materially affected both the Truworths business, being the Group’s fashion retailing business in South Africa, and the United Kingdom based Office footwear business, which had for many months prior to the lockdown been contending with negative consumer sentiment and Brexit- related uncertainty.
       As a result of the consequential impact on the profitability and liquidity of the Office business, the Truworths International board is considering all possibilities for Office, including various restructuring options, and the Group has engaged advisers to assist with this process.
       In light of these developments, an impairment of the Group’s carrying value of the Office trademarks and right-of-use assets relating to store leases will be required during the 52-week financial period ending on 28 June 2020 (“the period”). Such impairments, which are yet to be quantified, would impact the Group’s basic earnings per share (“EPS”), but would be excluded from the calculation of headline earnings per share (“HEPS”) and would not have cash flow consequences.
       The unprecedented economic crisis caused primarily by the severe negative impact of the ongoing COVID-19 pandemic has resulted in diminished revenue, reduced collections and an increase in the doubtful debt provision in respect of the debtors book in the Truworths business.
       Based on various scenarios, including the impact of the lockdown on trading and the performance of the debtors book up to the end of the period, as well as the duration of the lockdown in South Africa and the United Kingdom, the board currently anticipates that the Group will record a reduction of at least 30% (174 cents) in HEPS for the period, when compared to the prior period reported HEPS of 580 cents.
       As regards the impairments of the Office trademarks and right-of-use assets, the Group has considered various scenarios and their impact on the Group’s EPS for the period. Based on the outcomes of these scenarios, the Group will record a decline, and possibly a loss, in EPS for the period when compared to the prior period reported EPS of 145 cents. Given the current uncertainties in quantifying the impairments, it is not possible to provide an indication of the percentage decline in EPS with reasonable certainty at this stage.
       The board will provide the anticipated range of the decrease in HEPS and EPS for the period when it has reasonable certainty in this regard, in a further trading statement.
       The board further advises that, having regard for the Group’s currently projected financial performance and position in the short to medium term, it is unlikely that a final dividend for the period will be declared.
       The continued uncertainty resulting from the COVID-19 pandemic and the lockdown resulted in trading levels of the Truworths business in South Africa, since stores re-opened on 1 May 2020, increasing in the first week, but thereafter declining following the initial surge in demand, when compared to the prior corresponding period.
       The board is able to advise that the Truworths business has successfully extended the term of its borrowing facilities and thus has access to liquidity in the medium term. Management is committed to the execution of various strategies aimed at managing inventory, the account portfolio and expenses prudently during this time.

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