S&V Weekly Newsletter Vol.5 No.18, May 6, 2019

This Newsletter is sponsored by SAFLIA

LET'S MAKE 2019 A REALLY GOOD YEAR!

Please note: Click on any ad to go to the advertiser’s website

Retail last week

Comment from 3 retailers on Saturday
"We opened last Wednesday, despite it being a holiday, because pensioners were paid, and trading was good. We were affected by the floods the week before - we lost 2 days of trading during the cleaning up. Overall the year has been quiet." - Mahomed Timol, proprietor, Charmers, Durban, KZN, SA. Independent, 1 store, men's outfitter.

"It's picked up quite nicely. The end of April was disappointing, but May has started quite well. The year as a whole has been up and down - January and February were slightly disappointing, March and April picked up." - Chris Hattingh, manager, Chess International, East London, E Cape, SA. Independent, 1 store, men's outfitter.

"It's been a good week, and May is normally a good month. We were definitely down last month because of all the rioting around the 9th to the 11th - people didn't want to come out. Aside from April, I've been happy with the year so far. Winter came early, and the weather is important for us." - Sonja Düvel, proprietor, Chic Shoetique/Shoe Lovers, Somerset West, W Cape, SA. Independent, 3 stores. Women's and men's predominantly comfort footwear.

Wednesday's public holiday

This is an appeal to every reader who has the ability to vote on Wednesday: I can't imagine that any of you would support 'The Son Of The Soiled Mind', but if you do, well please don't vote. For everyone else, please exercise your vote, but carefully. This country needs to move to coalition governments, or at least to centrist governments where the parties change every few elections and where the ideological differences between the main parties aren't very great. The previous ruling party was in power for 46 years, this one has been in power for nearly 25. Neither was or is very appealing. The message is pretty obvious.

R-CTFL 'Masterplan': Leather, footwear, leather goods 'ignored'

The 'SA R-CTFL Value Chain Masterplan', a policy document to assist the growth of local manufacturing of clothing and footwear and their suppliers, commissioned by the DTI and prepared by B&M Analysts, has had little input from the footwear industry and none at all from the leather or leather goods industries.
       Southern African Footwear & Leather Industries Association director Jirka Vymetal said he had only become aware of the Masterplan process at the end of June 2018 through a member who is also involved in clothing.
       Mandy Owen, chairperson of the Association of SA Manufacturers of Luggage, Handbags & General Goods, said neither she nor her predecessor, Shaun Esson, had been invited to any meeting relating to the 'Masterplan'. She wasn't sure whether the association's secretary, Theo Heffer, who is currently gravely ill, had been invited.
       Stan Blumberg, a board member of the SA Tanning Employers' Association, said SATEO had not been informed of the 'Masterplan'.
       Vymetal said in July 2018 SAFLIA had "urgently" submitted a document and data to B&M, some of which was included in the final report.
       The final draft of the plan was presented at a meeting of stakeholders in Durban on April 24, but the only footwear and leather stakeholders invited were the unions, one of which, NULAW, forwarded details of the meeting to Vymetal.
       Replying to NULAW general secretary Ashley Benjamin, Vymetal wrote: "Yes, it must have been an oversight, but a very bad one. I cannot understand how they have left out footwear and for that matter the leather guys...This Masterplan has come under a bit of criticism (by other parties) already and this kind of oversight just adds to that. We cannot give input from the outside looking in...Unfortunately I am not able to attend at such short notice."
       For this report, he added: "We're concerned about the involvement of key players - are all key players on board, and do they support it?
       He said the idea of a plan wasn't unique and could be useful if it was inclusive. "Our industry is under tremendous stress. The local footwear and leather manufacturing industry has been going the wrong way for the past 2 years, while imports have been increasing. So it's not just about the poor economy, it's also about trade remedies, etc.."
       The author of the plan, B&M chairman Justin Barnes, said the footwear industry had been represented: "Please speak to John Comley of Eddels, who was invited as a representative of SAFLIA. SAFLIA made a couple of policy submissions over the course of the process. Also, Woolworths, Truworths, Edcon, and MRP were part of the process, not only TFG. Please speak to Michael Lawrence of the NCRF about retailer participation." 
       Through a clothing industry source, S&V has seen the final draft of the plan, which was sent to the invited parties with the warning that it was "not to be referenced or quoted, nor publicly distributed". It includes the following recommendations:
- Address illegal retailing (non-compliant malls and illegal rural town activity).
- Level the playing field in the formal retailing environment (pressuring international chains to source locally).
- Restrict ports of clearance for CTFL products (restricting imports to Durban, Port Elizabeth, Cape Town and OR Tambo International Airport).
- DTI to investigate the Colombian model of 'minimum specific tariff' (MST).
- Remedy illegal manufacturing in SA.
- CTFL tariffs and rebates to remain unchanged.
- Production Incentive (PI) and Competitiveness Improvement Programme (CIP) to be extended for a further 5 years.
- Introduction of a CTFL-specific investment support programme.
- DTI to initiate a stakeholder engagement process to align the R-CTFL value chain's annual operating cycle with the seasonal demand profile of the SA market.
- DTI to initial a Masterplan aligned CTFL skills development and technology transfer process.
- DTI to establish a Masterplan 'executive oversight committee' to oversee its implementation.

Paris Belts 'scaling back, not closing'

Johannesburg, Gauteng, SA – Paris Belts has "scaled back production, but isn't closing", MD Benjamin Cartoon said on Thursday, in response to a query about the company's future.
       However, Thabasile Mahlangu, administrator at the Gauteng branch of the National Union of Leather & Allied Workers (NULAW), said on Friday that company had closed.
       In an email, she wrote: "The employees that were working at Paris belts this year were taken on a contractual basis to finish off the orders, otherwise the company has closed down. For confirmation of this please contact our District Bargaining Council."
       NULAW forwarded correspondence from Paris Belts, dated October 31, signed by director Brian Haarburger, headed 'Notice of contemplated retrenchments in terms of Section 189 of the Labour Relations Act', in which he said the company had carried out retrenchments previously, and had made several efforts to sell the business. At that point, the company had 33 staff, of whom 27 were weekly-paid. It had retrenched 6 staff over the previous 12 months.
       Cartoon said the company had "thrown out the unprofitable stuff" and would continue at a reduced output. He declined to say what production was standing at.
       He said once Paris had completed a number of contracts within the next few months, it would probably switch to leather production only.
       Cartoon, who will be 73 this year, has been ill. He said he was "semi-retired", and was working from home.
       In an email, Paris Belts majority shareholder Irwin Belcher, who lives in the U.S., said "your information is incorrect, it’s business as usual at Paris Belts".

Ethiopia’s Industrial Parks Generate $103 Million Export Income

Published on May 02, 2019
The government of Ethiopia has secured $103 million export earnings from products manufactured in industrial parks over the first nine months of its fiscal year started July 8, 2018.The performance has increased by 40 percent compared to last year same period, according to Ethiopian Investment Commissioner Abebe Abebayehu, who told the state news agency, ENA. He noted that the country has met 70 percent of its export earning target for the nine months period. The government of Ethiopia has secured $103 million export earnings from products manufactured in industrial parks over the first nine months of its fiscal year started July 8, 2018.The performance has increased by 40 percent compared to last year same period, according to Ethiopian Investment Commissioner Abebe Abebayehu, who told the state news agency, ENA. He noted that the country has met 70 percent of its export earning target for the nine months period. Read more. Source | New Business Ethiopia

Edgars acquisition approved with conditions

Pretoria, Gauteng, SA – The Commission has taken a decision to recommend to the Competition Tribunal (Tribunal) that the proposed acquisition of Edgars Consolidated Stores Limited (ECSL) by New HoldCo (New HoldCo) be approved subject to conditions.
       The Commission found that the proposed transaction was unlikely to result in a substantial prevention or lessening of competition in the relevant markets. The proposed transaction seeks to mitigate the dire financial position the Edcon Group finds itself in and avoids potential liquidation which may result in job losses.
       The Edcon Group and the Economic Development Department (EDD) had agreed upon certain conditions aimed at promoting BEE, local procurement and preserving employment and the Commission has recommended that the merger is approved subject to such conditions.
       Competition Commissioner, Tembinkosi Bonakele says: “The Commission believes that the proposed transaction will have an overall positive effect on employment, particular on the retail industrial sector because it seeks to preserve the job levels within the Edcon Group. The group intends to employ additional staff in the future. A significant number of Edcon employees could lose their employment were the business to be placed under business rescue proceedings if the acquisition is not approved.”
       The conditions are a culmination of the merging parties and the EDD agreeing that the proposed transaction be approved subject to conditions substantively similar to those in Parentco/Edcon merger in 2016.
       New HoldCo is a shelf company with no previous operations or activities in South Africa that has been established for the purposes of acquiring the entire issued share capital of the Edcon Group. ECSL controls Edcon Limited (Edcon) and, in turn, Edcon is controlled by Parentco. For the sake of convenience, ECSL, Edcon and all their subsidiaries are referred to as the Edcon Group.
       The Edcon Group is active in the retail of apparel through various divisions, which sell men’s, women’s and children’s wear, fragrances, cosmetic products, home wares and cellular products.
       The shareholders of New HoldCo comprise of local and international financial investors in the form of private equity investments firms and banks. None of the shareholders conduct any clothing retail activities. None of the shareholders of New HoldCo exercise any form of control over New HoldCo.

BACKGROUND
The proposed transaction follows a failed attempt to restructure the Edcon Group in 2016. The previous restructuring transaction involved a consortium of creditors, “Parentco” which sought to acquire the entire issued share capital of Edcon Group (Parentco/Edcon).
       The Commission recommended an unconditional approval of Parentco/Edcon merger, however, the Tribunal approved the merger subject to public interest conditions that had been agreed to between the EDD and the merging parties.
       The Parentco conditions required Edcon Group to, amongst other things, use its best endeavours to avoid job losses, increase procurement from local suppliers and maintain BEE participation. Since the implementation of the Parentco/Edcon merger, the Edcon Group has provided the Commission and the EDD with periodic updates regarding Edcon Group’s financial challenges. - Sipho Ngwema, Head of Communication, The Competition Commission of South Africa, +27 (0)12 394 3493 / (0)81 253 8889, SiphoN@compcom.co.za

Shoe horns

A request: Could anyone who supplies shoe horns please let me know. As much detail as possible, please. Please reply to tony@svmag.co.za

They Said It

"Seeing all the sad comments of how bad the retailers are finding each week reminded me of an occasion about twenty odd years ago when I asked a friend of mine who had a couple of shops in Durban, how business was going? He replied, 'Well Glen, it's a bit quiet in the morning, and then it tapers off in the afternoon.' Pretty much sums up how all the retailers are finding it at the moment." - Shoprite Checkers senior buyer footwear & luggage, Glen Mitchell.

"Yes, sorry won’t be able to make it as I will be out of the country from 13 May to 24 May.  Will think of you while I must drink hot beer." - Rolfes Leather Division MD Quintin Marais on why he won't be at the SLTC Convention.

"Can I tell you anything more? I love talking!" - Sonja Düvel of Chic Shoetique and Shoe Lovers in Somerset West.

SLTC Convention Countdown: Just 2 weeks to go

The final programme has 10 papers:

The convention will take place from May 17-19 at Green Leaves Country Lodge & Venue in the Magalies Mountains.
To book, please contact SLTC secretary Nicola Phipps at nphipps@telkomsa.net.

S&V Directory - Order now

The directory is ready. On sale for R450. The online version is also available at R450 for 12 months' access.

2019 Trade Fairs Another essential service from S&V

Please note that we have put a list of the 2019 trade fairs and conferences on our website, linked to their websites: http://www.svmag.co.za/events

Exchange rates

Source: http://www.x-rates.com/calculator/

ABSA Agri Trends 03/05: Hides & skins prices

The demand for leather is remaining stubbornly low although slaughter numbers are increasing globally. Prices are expected to remain low however the market is hopeful that the recent slight increase in prices could be a turning point for the industry. Bovine: The average hide price over the past week was R1.82/kg green. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. Sheep skins: Dorper R33/skin

06/05/1932: Yusuf Sayanvala, Westgate Wholesalers, Brits.
06/05/1979: Stelio Krystallidis, K-West/Fashion Trims, Johannesburg.
07/05/1947: Mike Rolfe, retired, formerly Barker Footwear, Cape Town.
07/05/19??: Gerard Aarnikhof, formerly Angels Shoes, Cape Town.
08/05/1950: David Boast, retired, formerly African Hide Trading, Port Elizabeth.
08/05/1956: Jeff Human, John Whittle Components, Cape Town.
09/05/1949: Mike Millar, retired, formerly MRM Agencies, Johannesburg.
09/05/1955: Jill Fraser, Claw Boot International, Johannesburg.
09/05/1960: Rodney Reynders, left the industry, Durban.
09/05/1963: Don Tully, Groundcover Leather Company, Curry’s Post.
09/05/19??: Barry Selby, The Athlete’s Foot, Cape Town.
09/05/19??: Sarie de Wet, KKI Leather Marketing, Oudtshoorn.
10/05/1950: Brian da Costa, agent, Port Elizabeth.
10/05/1971: Ashraf Kathrada, Catz, Cape Town.
11/05/1945: David Maisey, emigrated, formerly Brondean Agencies, Port Elizabeth.
11/05/1951: Walter Kurth, emigrated, formerly Corbeau, Cape Town.
12/05/1946: Gordon Howie, The Runner group, Johannesburg.
12/05/1954: Louise Pelser, SAFLEC, Durban.
12/05/1976: Hennie Groenewald, ACA Threads, Cape Town.

In Memoriam this week

06/05/2016: Herbert Lohmeier (b. 25/11/1954), H. Lohmeier Men’s Outfitters, Swakopmund.
06/05/2018: Tony Bradshaw (b. 22/06/1952), left the industry, formerly Jack & Jill [closed], Port Elizabeth.
08/05/2010: Bob Hunter (b. 18/11/1938), footwear agent, Johannesburg.
08/05/2018: Peter Jönsson (b. 01/04/1967), formerly TFL SA and others, Johannesburg.
10/05/2011: Albino Rodrigues De Oliveira (b. 09/01/1944), Andreoli Shoes/Giorgio Marelli/Sabrina Shoes [all closed], Durban.
12/05/2011: Charles Burger (b. 28/12/1968), Klein Karoo International, Oudtshoorn.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:
Aron Sport cc, sports goods retailer, Potgietersrus, Limpopo, SA: http://aronssport.co.za/
Art Africa, clothing, footwear and leather goods retailer, Swakopmund, Namibia: https://www.facebook.com/art.africa.Namibia/

Upcoming Publications:

- 07/05 /2019: S&V Protect V13N01

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Contact us

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

Next newsletter: May 13, 2019.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

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