S&V Weekly Newsletter Vol.4 No.11, March 19, 2018
This Newsletter is sponsored by SAFLIA
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Sutherland Tannery: Hart secures loan, proposes settlement
Concurrent creditors offered 10c in the Rand
Pietermaritzburg (SA) – Sutherland Tannery majority shareholder Wynand Hart has secured a loan of R12.9 million from Business Partners with the aim of reaching a settlement with creditors and re- opening the business as a subsidiary of his other tanning company, Leather from Hart.
In terms of a proposal issued today by joint liquidator Glen Usher of Usher Attorneys, most of the money would be used to pay Sutherland's only secured creditor, ABSA, while the balance would be used to cover the bond and administration costs of Business Partners, to pay off SARS, and the liquidators' fees.
In addition, Hart would contribute R2 million - half each to preferent and concurrent creditors. Concurrent creditors, who are owed almost R10.6 million, could expect 10 cents in the Rand.
Listing the benefits of accepting the proposal as opposed to opting for liquidation, Usher said ABSA would be paid in full instead of receiving 44 cents in the Rand, employees would receive approximately 75 cents and concurrent creditors 10 cents, both instead of nothing.
In addition, 40 to 50 former employees would be re-employed, there would be "a substantial saving" in administration costs, creditors would be paid much sooner than in the case of a liquidation, and Leather from Hart would have benefit of the accumulated loss.
Treasury plans to make CTFL orders 'more meaningful' for industry
Pretoria (SA) – The National Treasury's contract management division says it is talking to various government departments and CTFL suppliers to make government tender orders more meaningful.
In a response to a query from S&V, a Treasury spokesperson wrote: "National Treasury has embarked on an industry and commodity analysis to understand the entire CTFL sector in order to look at revitalising the sector by consolidating volumes in order to enable job creation and small business empowerment.
"Consultations are at an advanced stage with the end user departments and the supply market."
Tenders are normally published late in the year for the following year, but the 2018/9 tenders have not yet been released, presumably delayed by the Treasury's investigation. It said the tender would be issued "later this year", but would not be drawn on a date.
Chic Shoes, which is in liquidation, has been the major supplier of women's leather court shoes to the State, and did not complete its orders for the 2017/8 tender.
Asked what effect Chic's closure would have on the tender process, the spokesperson wrote: "National Treasury is aware of the liquidation and it is unfortunate that this was not brought to the department’s attention last year. A circular has been issued on the National Treasury website at the following link - wherein Treasury’s clients have been advised to procure using their normal procurement process."
NRCS levies to increase 6%
Durban (SA) – Levies for most products covered by the National Regulator for Compulsory Specifications (NRCS), including safety footwear, will go up 6% - the same percentage increase as in 2017 - officials said at a fee and levy tariffs consultation session here on Monday.
The levies are compulsory for businesses manufacturing, importing or selling products covered by compulsory specifications. Levies make up about 55% of the NRCS's income.
Tando Magolego, acting GM of the chemicals, mechanical & materials division, which includes safety footwear, said the levies were used to improve regulation, improve the division's coverage, acquire resources (notably people), process applications and cover legal costs.
There will be further meetings in Port Elizabeth, Cape Town and Pretoria.
Edcon results: Overall sales down, Edgars footwear and Zimbabwe stores report growth
Johannesburg (SA) – Edcon last week reported a 9.4% drop in retail sales to R7.6 billion in its unaudited trading update for the 13 weeks ended December 23. The total number of stores dropped 16.4% from 1 545 to 1 292.
There were some positives.
It said ladieswear "continued to trade positively" in both Edgars and Jet, and that footwear also traded positively in Edgars. However, footwear "underperformed" in Jet.
Zimbabwe, Ghana and Zambia "reported an increase in local currency sales", and the Zimbabwean operation, with 51 of the group's 186 stores in other African states, traded well. However, "all territories except Zimbabwe and Ghana reported a decrease in retail sales with the biggest decline experienced in Namibia. Retail sales in Swaziland, Lesotho, Namibia, Zambia and Botswana were impacted by the sale of the Legit business."
In South Africa, the Edgars division "achieved positive retail sales growth in ladieswear and footwear for the third consecutive quarter, realising benefits from our new strategies in these categories. Cosmetics, menswear, childrenswear, homeware, cellular and active clothing retail sales decreased when compared to the third quarter 2017," the report said.
In the Jet division, "ladieswear performed positively compared to the third quarter 2017 following strategic initiatives introduced in the division, whilst the remaining categories, including menswear, childrenswear, footwear, homeware and hardlines, continued to underperform in a competitive market."
The report listed the following key features:
- Retail sales decreased by 9.4% to R7,646 million from R8,441 million impacted by the sale of our Legit business, the exit of non-profitable international brands and the closure of unprofitable stores whilst like-for-like retail sales decreased by 4.9%
- Excluding Legit, Edgars Shoe Gallery, unprofitable international brands being exited and the alignment1 of the trading period, retail sales decreased by 3.8% to R7,710 million
- Gross profit margin up 190bps from 36.1% to 38.0%
- Excluding the impact of Legit, Edgars Shoe Gallery, brands being exited and the alignment1 of the third quarter 2018 trading period to the third quarter 2017, gross profit increased by 2.3% to R2,952 million. The gross profit margin increased 230bps from 36.0% to 38.3%
- Pro-forma Adjusted EBITDA decreased by 31.4% to R619 million
- Operating cash before changes in working capital increased by R397 million in third quarter 2018 compared to an increase of R449 million in the third quarter 2017
- Ladieswear continues to trade up in both Edgars and Jet
- The super senior liquidity facility was extended to 30 September 2018 and Edcon is in discussions with stakeholders on options to refinance the Edcon Group’s indebtedness
- Edcon has secured the consent of all lenders under its super senior credit facilities and super senior liquidity facilities to waive a breach of the financial covenant and certain information covenants and defer any cash pay interest falling due during the waiver period, which interest will be capitalised. The continued effectiveness of the waivers and deferrals is subject to Edcon satisfying certain information undertakings and conditions subsequent by the agreed dates.
Venue: Apartment 24, 77 Grayston Drive, Sandron
Date: 23rd March - 27th March 2018
Time: 23rd: 3pm till 8pm, 24th - 26th: 8:30am till 8pm, 27th: 8:30am till noon.
For further information, kindly contact Ahmed Shaikh on 082 3727197 or Solly Seedat on 076 3078638 or email acs@footcoverings.co.za
SLTC Countdown - 10 weeks to go
Columnist Sam Setter confirmed as guest speaker
The acerbic columnist who writes under the nom de plume 'Sam Setter' in Leather Magazine is to be a speaker at the SLTC Convention. He will also give an address at the annual dinner.
When: May 18-20.
Where: Villa Paradiso in the Hartbeespoort Dam area.
News: Confirmed speakers are:
- Dr Geoff Tomlinson, R&D Manager, UCL Company. Topic: Vegetable tanning - art or science?.
- Dr Jay Irkhede, director: leather & footwear at the DTI. Topic: Industry status, policy and programmes.
- Dr Clive Jackson-Moss, director, International School of Tanning Technology. Topic: TBC.
- James Daniel, Stahl. Topic: TBC.
- Quintin Marais, Rolfes. Topic: TBC.
Three more speakers are to be confirmed shortly.
Lewis Hamilton to promote Tommy Hilfiger
Amsterdam, The Netherlands (March 15, 2018) – Tommy Hilfiger, which is owned by PVH Corp., has made British Formula One racing driver and four-time Formula One World Champion Lewis Hamilton will appear as the new global brand ambassador for Tommy Hilfiger men’s, including Hilfiger Collection, Tommy Hilfiger Tailored and Tommy Hilfiger menswear, underwear and swimwear, starting Spring 2018.
They Said It
"It's probably my height." - Tando Magolego, of the National Regulator for Compulsory Specifications, to Eugene du Toit, technical manager of the BBF group. He had said to her he felt much more comfortable dealing with the NRCS having met her in person. Pictured above right with Du Toit and BBF QA co-ordinator Rita Pooran, she stands a compact 1.5 m tall in her stockings.
Exchange rates
Source: http://www.x-rates.com/calculator/
| |
Euro € |
GBP £ |
US $ |
CNY ¥ |
| 11/12/2017 |
R15.82 |
R17.99 |
R13.40 |
R2.03 |
| 05/01/2018 |
R14.86 |
R16.69 |
R12.33 |
R1.90 |
| 13/01/2018 |
R15.14 |
R17.03 |
R12.41 |
R1.92 |
| 22/01/2018 |
R14.76 |
R16.75 |
R12.08 |
R1.88 |
| 26/01/2018 |
R14.74 |
R16.79 |
R11.86 |
R1.87 |
| 05/02/2018 |
R14.96 |
R16.89 |
R12.02 |
R1.91 |
| 12/02/2018 |
R14.64 |
R16.51 |
R11.95 |
R1.88 |
| 16/02/2018 |
R14.43 |
R16.30 |
R11.63 |
R1.83 |
| 23/02/2018 |
R14.19 |
R16.12 |
R11.54 |
R1.82 |
| 05/03/2018 |
R14.60 |
R16.39 |
R11.85 |
R1.86 |
| 12/03/2018 |
R14.58 |
R16.43 |
R11.82 |
R1.86 |
| 16/03/2018 |
R14.72 |
R16.70 |
R11.97 |
R1.89 |
Birthdays this week
19/03/1959: Deon van Rensburg, Wayne Plastics, Krugersdorp.
19/03/1972: Morné Pienaar, Memories, Bloemfontein.
19/03/1972: Faieza Akoon, Urban Legends, Bloemfontein.
21/03/1970: Shuhui Liu, Chang Tong Trading, Johannesburg.
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 16/03: Hides & skins prices
The average hide price over the past week was R9.62/kg green. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. The average price for Dorper skins was R33.75, and for Merino skins was R90.50.
| Hide & skin price progression |
| Date |
Hides/Kg |
Dorper/Skin |
Merino Skin |
| 19/01 |
15.34 |
45.56 |
81.38 |
| 24/01 |
15.17 |
40.92 |
89.52 |
| 31/01 |
15.10 |
46.00 |
94.55 |
| 14/02 |
14.65 |
47.33 |
95.29 |
| 15/03 |
14.25 |
39.30 |
78.75 |
| 24/03 |
14.13 |
45.27 |
94.45 |
| 28/03 |
14.07 |
45.27 |
94.45 |
| 04/04 |
14.83 |
41.92 |
87.58 |
| 11/04 |
14.68 |
41.92 |
84.12 |
| 19/04 |
14.77 |
43.85 |
92.32 |
| 25/04 |
14.75 |
41.25 |
92.27 |
| 04/05 |
14.79 |
43.33 |
92.69 |
| 10/05 |
14.75 |
40.50 |
88.41 |
| 16/05 |
14.58 |
40.83 |
90.96 |
| 31/05 |
14.62 |
40.50 |
87.95 |
| 09/06 |
14.58 |
41.82 |
96.35 |
| 23/06 |
14.40 |
40.42 |
101.25 |
| 29/06 |
14.30 |
41.36 |
98.44 |
| 07/07 |
14.33 |
43.33 |
100.94 |
| 13/07 |
14.37 |
44.44 |
114.58 |
| 28/07 |
14.14 |
43.64 |
97.50 |
| 04/08 |
14.16 |
43.69 |
99.64 |
| 14/08 |
14.08 |
38.99 |
92.75 |
| 18/08 |
13.70 |
43.18 |
98.96 |
| 25/08 |
13.93 |
43.75 |
100.96 |
| 01/09 |
13.14 |
44.09 |
101.25 |
| 08/09 |
12.88 |
41.82 |
100.83 |
| 21/09 |
12.64 |
|
|
| 03/10 |
12.50 |
|
|
| 11/10 |
12.52 |
|
|
| 20/10 |
12.23 |
39.30 |
110.23 |
| 27/10 |
12.12 |
37.30 |
94.32 |
| 02/11 |
12.19 |
|
|
| 10/11 |
12.24 |
37.00 |
101.75 |
| 30/11 |
11.82 |
32.56 |
94.25 |
| 07/12 |
11.76 |
35.50 |
92.50 |
| 14/12 |
11.53 |
35.50 |
91.86 |
| 02/02 |
10.39 |
32.50 |
92.22 |
| 09/02 |
10.17 |
33.13 |
91.27 |
| 16/02 |
9.94 |
32.50 |
88.26 |
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
Classified Adverts
FOOTWEAR TECHNOLOGIST
The Southern Cape Regional Footwear Cluster is based in Great Brak River and supplies services and training to its members in the Southern Cape (Great Brak River and Oudsthoorn) as well as in the Western Cape (Cape Town). It is a Non-profit Company, funded by the DTI and its members and was establish to, among other objectives, develop and train future generations of well skilled Supervisory and operator production employees for the Footwear Industry.
SCRFC, wishes to recruit a Footwear Technologist who is a practical, energetic and an experienced footwear manufacturing/production specialist. It is expected that the successful candidate will have practical knowledge in all facets of Shoemaking and Manufacturing processes including Management and Industrial Engineering experience. The position is a fixed term contract and the person will be based in the Southern Cape. Remuneration is negotiable and will be on a Cost to Company basis. Benefits will be limited to those prescribed by legislation.
Please e- mail a detailed CV plus qualifications to Mrs Julia Paulse at julia.paulse@scrfc.co.za
Contact us
News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za
Next newsletter: March 26, 2018.
SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za
Should you wish to subscribe email tony@svmag.co.za
Our website www.svmag.co.za
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