S&V Weekly Newsletter Vol.3 No.8, February 27, 2017

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Stuttafords: Mixed reception for consignment plan

Johannesburg (SA) – Stuttafords’ creditors will meet next Monday to hear progress on efforts to rescue the company. In the meantime, they’re being encouraged by business rescue practitioners Neil Miller and John Evans of Mazars to accept 1 of 2 alternative plans to restock the company: a consignment agreement, or an agreement for the sale on credit of product to Stuttafords on 120 days’ credit, with reservation of ownership.
        Creditors spoken to varied in their response:
Though critical of the lack of an agreement on the way forward, Laurence Lotzoff, MD of Hush Puppies distributor Dale Footwear, which is owed R2 340 723, said he would “support the consignment stock option”.
        He said he believed most of suppliers would accept the consignment option, “because it’s essentially risk-free for all parties. I’m keen to continue trading with Stuttafords to be able to mitigate some of my loss.”
        He said Stuttafords’ 12 stores would be “difficult to replace” for Hush Puppies.
        However, he was critical of “the differences of opinion between the shareholders which seem to have an adverse affect on management's ability to lead with confidence”.
        “They’re not generating confidence among suppliers. If they leave it much longer, it won’t be possible for them to get stock, and without that, they can’t trade.”
        Stan Kotkin, MD of Footwear Trading, which is owed R4 755 083, said the company had been supplying Stuttafords on consignment “for years”, and that he would be happy to continue “should the company come out of business rescue and continue operating”.
        “We’re geared up to do it, and it’s worked well for us – so much so, that we have our own staff in their stores because we felt they would be more effective.”
Dangee Carken, which is owed R680 429, wouldn’t support either option “under the current circumstances”, MD Robby Stoller said.
        “My business isn’t geared to the consignment option, or to filling in small quantities. As far as the other option is concerned, it doesn’t address what they already owe. It’s a deal which favours Stuttafords, not the creditors.”
        Falke Eurosocks is owed R498 999, and has been made an offer, CEO Martin Grobbelaar said.
        “With regard to the consignment suggestion, it would give them room to manoeuvre, but we feel the bigger problem is with their business model.
        “Globally, chains are under pressure, with consumers opting for specialised independents. In Stuttafords’ case, we feel they have lost their relevance in the market, and they need to reinvent themselves if they are to succeed.”
        At Kaytex Belt, owed R212 507, marketing director Zahir Kader said the logistics of consignment stock were unattractive to the company. “The cost of the paperwork to delivery small quantities just isn’t worth it,” he said.


*All amounts quoted are from a list of creditors provided to creditors by the business rescue practitioners. It lists a ‘claim amount’ and an ‘amount per Stuttafords’. The figures quoted are from the ‘claim amount’. These figures were as of the date Stuttafords went into business rescue, and are no longer accurate in all cases.

This partial list of creditors includes companies which supply footwear, leather goods or hosiery as part or all of their business: Adidas (R1 347 619), Apollo Brands (R1 647 375), Asics (R690 498), Barker division of Bolton (R721 034), Dreamworks (R301 347), Florsheim (R499 650), Glencarol Industries (R565 426), GSM Trading t/a Billabong (R179 327), Interbrand (R972 987), Intershu Distributors (R682 021), Intobrands (R12 918), JCE Industries (R808 819), Medicus (R259 294), Musgrave Agencies (R1 961 858), New Balance (R676 883), New Pier Trading (R299 693), Olympic-Flair (R373 725), Polo Distribution Division of Carter Harris (R10 948 360), Puma Sports Distributors (R2 179 974), Reviva Technology – Hurley (R370 120), Skye Brands consignment (R273 865), Skye Distribution (R320 688), The House of Busby (R6 374 346), The Scottish Knitwear Group (R13 463 420), Tommy Hillfiger (R14 617 819), Trail Terrain (R439 848).

Billabong results down, ‘prospects positive’

Gold Coast (Australia) – Billabong International Limited’s results for the 6 months ended December 31, 2016 showed global group sales 9.5% down, according to an announcement by the Australian Securities Exchange (ASX) on February 24.
        It said total group sales of AUD$508.3 million were down 9.5% year-on-year, and down 7.6% on a constant currency (cc) basis. When the sale of the Sector 9 business is taken into account, revenue was down 5.8% cc.
        The day before this announcement, Billabong announced the sale of another brand, Tigerlily, for AUD$60 million, and said the proceeds would be used to pay off debt.
        It said gross margins were “flat overall; up in Americas, down in the Asia Pacific (APAC) region”.
        CEO Neil Fiske said the group had simplified its business, cut its inventories and cost of doing business, and was seeing “a strong profit lift” in the Americas.
        Asked how the brand was doing locally, GM of Billabong in SA, Ernest Bendeman, said Billabong SA “as a region forms part of APAC as a direct subsidiary, and we do not report down to a regional level as per Billabong International group policy”.

S&V Directory: Order reminder

The annual S&V Leather, Footwear and Leather Goods Directory will be out within days. Anyone wanting copies is asked to URGENTLY email their requirements. The unit price is R450, but discounts for multiple copies will be offered. – [tony@svmag.co.za]. – [tony@svmag.co.za]

15 top finished leather manufacturers to exhibit at the India Leather & Footwear Trade Expo next week

Cape Town (SA) – The Council for Leather Exports (CLE) will host the India Leather & Footwear Trade Expo next week Wed, 8 & Thurs, 9 March 2017 at the CTICC, Cape Town. This year, there will be 15 leading finished leather manufacturers (including buffalo, cow, sheep and goat) exhibiting. In addition to finished leather manufacturers, there will also be reputable manufacturers from India showcasing a vast range of products from ladies, men’s and children’s leather and non-leather footwear and sandals; leather jackets; small leather goods including handbags, wallets, belts, etc; safety shoes and boots; saddlery items as well as shoe components. If you have not already pre-registered for the trade expo, go to www.urexpo.co.za and complete the online registration form to gain free entry. The full list of exhibitors is available from LTE – Leaders In Trade Exhibitions (local organiser), Email: deidreh@worldonline.co.za, Tel: +27 21 790 5849.

Simac Tanning Tech: Record growth continues

From Diomedea
Milan (Italy) – Simac Tanning Tech, the international exhibition of machinery and technology for the footwear, leather-goods and tanning industry, closed with a two-figure increase in visitor numbers compared with 2016, which had already been a record year for the event, and recorded longer exhibition visits. Increases were also seen in exhibition space (+20%) – a concrete sign of a constantly growing exhibition that can increasingly adapt to market demands.
        The buzzwords of this year’s exhibition were Industry 4.0, environmental sustainability and traceability: the first should be seen independently of government incentives to renew machine pools, something now of universal concern, while the others stem from growing market awareness of environmental issues. – [www.diomedea.it]

They Said It

"For me it looks as though the footwear industry in SA has been wiped out." - Trim maker Centra-Cast Industries’ Ian Long, asked to comment on trading conditions. Most of his business is outside the footwear industry.

Appointment

Johannesburg (SA) – - Clinton Paterson, deputy GM at Skye Distribution, has been appointed acting MD.

Movements

Derek Ellway , who set up Inspecta Shoe as an independent quality monitoring business with offices in SA and Hong Kong, said earlier this month he had moved back to the UK to establish an importing business.

Johannesburg (SA) – Former Polo footwear manager Wyatt Brodie has (temporarily) left the industry to join a venture which processes waste edible oils into bio-diesel. He said he had “needed a change of scenery”, but that he expected, at some point, to return to the industry. – [wyattbrodie27@gmail.com]
        His former colleague at Polo, Duncan Kukard, has joined Busby Trading as luggage executive. – [DuncanK@busbyhouse.com]

Milestones

Harry Adams
Pinetown (SA) – Harry Adams, co-founder of AG Laminators, now Finlam Technical and Finlam Textiles, died on February 18. An obituary will follow in the next issue of S&V Footwear & Leather Goods.

Ron MacNiven
Mount Edgecombe (SA) – Ron MacNiven, buyer for Decofurn for over 30 years, and part time cartoonist for S&V many years ago, retires tomorrow. In a mail, he wrote: “It is a long time since we first met and I enjoyed doing Cartoons for S&V . Such a pity that as time went by, I was too busy to continue to do so and especially with so many ‘characters’ left for other countries, retired  or passed away. The industry has shrunk so much that there are fewer characters, but still many ‘PENGUINS’!” – [ronmacniven44@gmail.com]

Butterfly Feet
From Robby Stoller, Dangee Carken
Johannesburg (SA) – Butterfly feet has just reached 50 000 likes on its Facebook page – the fastest of any of our brands to reach this milestone, taking less than half the time it took Miss Black to reach that point.
        Adam Freeman, who heads up the brand, is overwhelmed with the demand. We have found our groove 3 seasons in and already the numbers are doubling season on season. This has got to be the most exciting women comfort brand to hit the market in years. – [+27 (0)11 402 0312, info@dangeecarken.co.za, www.butterflyfeet.co.za]

Birthdays this week

27/02/1975: Denver Mahabeer, Edgars, Johannesburg.
28/02/1945: Basil da Silva, Mendelson & Frost, Cape Town.
28/02/1969: Dilesh Makan, agent, Johannesburg.
02/03/1945: Sakkie van der Vyver, retired, formerly Adidas, Cape Town.
02/03/1953: Garth Ewing, Garth Ewing Agencies, East London.
04/03/1946: John Commins, retired, formerly Wayne Plastics, Johannesburg.
04/03/1950: Mike Gedye, Michelle Footwear, Durban.
04/03/1977: Regan Govender, Paragon Footwear, Pietermaritzburg.
05/03/1937: Arnold Buckby, agent, Cape Town.
05/03/1949: Tony Carnecky, retired, formerly Futura Footwear, Pinetown.
05/03/1983: David Novos, Economic Shoes, Paarl.
05/03/1986: Muhammed Omar, Fashion Square, Durban.

In Memoriam this week

27/02/2010: Amanda ‘Mandy’ Terry (b. 20/02/1969), Makro, Johannesburg.
28/02/2016: Johnny Parboo (b. 21/10/1945), Labora Shoes, Durban.
01/03/2004: Sandra Faye Campbell (b. 09/06/1971), Dunn’s Stores, Johannesburg.
02/03/1991: Edward Powell (b. 12/02/1967), agent, Johannesburg.
03/03/2003: Gerry Elder (b. 03/08/1928), agent, Cape Town.
03/03/2010: Ernest Alfred ‘Basie’ Heunis (b. 17/05/1923), Silverton Tannery [closed], Pretoria.

Do you have any names you’d like to add to our list of birthdays and In Memoriam? Please send the details.

ABSA Agri Trends 14/02: Hides & skins prices

The average bovine hide price over the past week was R14.65/kg green. Hide prices are determined by the average of RMAA and independent companies. “The recent strength of the currency and pressure from the demand side has been adding pressure on prices. There may also be stocks still sitting from December, which further add pressure on prices.”
        The average price for Dorper skins was R47.33/skin and Merino was R95.29/skin.

Trade Fair dates

For a list of local and international trade fairs covering footwear, leather goods, leather and PPE, visit our website: http://www.svmag.co.za/events.php

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: March 6, 2017.

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