S&V Weekly Newsletter Vol.5 No.32, August 12, 2019

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Retail last week

Comment from 4 retailers on Saturday
"Thursday and Friday were quite good, today has been fairly quiet. Month end and beginning of the month are generally okay, but it's no more like it was. I've introduced hair braids and cosmetics to the business, and they are doing well." - Shehnaz Desai, manager, Fashion Feet, KwaDukuza, KZN, SA. Independent, 1 store, mainly women's budget footwear.

"It picked up on Thursday afternoon, but the rest of the week has been quiet. We did well during the school holidays, but since then it's been quiet." - Muhammed Omar, director, Fashion Square, Durban, KZN, SA. Independent, 1 store, budget family outfitter.

"The weekend has been quiet. People here like to go away for long weekends. But I'm sure it will pick up again around the 15th and the 25th, when people get paid." - Camara Amadou, member, Fashion Wear, Pretoria, Gauteng, SA. Independent, 1 store, men's and women's boutique.

"August is normally not a good month because of the change of season. As for the long weekend, what we've noticed is that when a public holiday makes a long weekend, people go away and there's very little business. I've had this business for 4 years, and previously I was open as often as I could be, because you can't sell if you're not open and if you don't have stock. This weekend I didn't open on Friday, only on Saturday, and it wasn't busy. As for the future, nothing seems to be happening from the government that we can see, so these are scary times. We'll just have to wait and see." - Marlan Naicker, member, Featherby's for Shoes, East London, E Cape, SA. Independent, 1 store, women's footwear specialist.

Trade stats January-June

Pretoria, Gauteng, SA (July 31, 2019) – The SA Revenue Services released trade statistics for June 2019 which showed that the value of the value of hides, skins & leather trade - imports and exports - has fallen this year by comparison with last year, while the value of footwear & accessories trade - imports and exports - has increased. The former figures would have been influenced by the global drop in hides and skins prices.
       Hides, skins & leather trade shows a small trade surplus, while footwear & accessories trade shows a large trade deficit.
       Hides, skins & leather exports for June were worth R298 454 569, while imports amounted to R299 038 667 for a trade deficit of R584 098. The cumulative export figure for January-June was R1 744 940 232 by comparison with R2 098 772 313 for the same period last year. The cumulative import figure for January-June was R1 719 019 253 by comparison with R1 723 207 758 for the same period last year.
       Footwear & accessories exports were worth R205 189 052, while imports amounted to R1 310 668 020 for a trade deficit of R853 610 096. The cumulative export figure for January-June was R1 365 842 651 by comparison with R1 310 668 020 for last year. The cumulative import figure for January-June was R6 683 123 167 by comparison with R6 096 803 721 for the same period last year.

Stock Exchange News Service (SENS) release

Steinhoff Investment - Pepkor trading update

This is an extract from the report.
Cape Town, W Cape, SA (August 7, 2019) – Pepkor increased revenue by 8.5% to R53.1 billion for the nine months ended 30 June 2019. Performance was supported by a stronger third quarter which saw revenue grow by 11.7%, largely benefitting from the shift of Easter to April. Trading however, remains volatile in an environment of continued pressure on consumer spending.

Clothing & general merchandise
The clothing and general merchandise segment reported revenue growth of 6.4% for the nine- month period, supported by 9.2% growth during the third quarter.
       For the nine-month period, the Pep and Ackermans brands in aggregate reported sales growth of 6.7% and like-for-like sales growth of 2.9%. Retail space expanded by 4.8% year-on- year. Core clothing, footwear and homeware (CFH) product categories achieved 7.1% sales growth and 3.5% like-for-like growth. This remains encouraging in the current operating environment. Pep and Ackermans in aggregate reported inflation of 4.2% in CFH retail selling prices.        Pep Africa reported a decline in sales of 0.7% in rand terms for the nine-period. This includes strong constant currency performance with sales growth of 14.9% and like-for-like growth of 11.4%. Good results were achieved in most countries while macro-economic challenges in Zimbabwe continue to impact performance.
       The Speciality division reported sales growth of 9.5% with like-for-like growth of 4.2%, in aggregate, for the nine-month period. Satisfactory performance was achieved in the clothing product categories with continued softer performance in footwear.

Outlook
Pepkor's defensive market position and strategy of providing customers with value at affordable prices continues to resonate with customers, as demonstrated through continued market share growth. This will continue to support performance in challenging operating conditions where sales volatility is expected to continue as customers have to contend with high levels of unemployment and increased cost of living in what remains to be an extremely challenging retail environment.

Impact of Pepkor group's pro forma constant currency disclosure
The Pepkor group discloses unaudited constant currency information to indicate Pep Africa's performance in terms of sales growth, excluding the effect of foreign currency fluctuations. To present this information, current period turnover for Pep Africa reported in currencies other than ZAR are converted from local currency actuals into ZAR at the prior year's actual average exchange rates. The table below sets out the percentage change in sales, based on the actual results for the period, in reported currency and constant currency for the basket of currencies in which Pep Africa operates. 

Competition Tribunal approves Footgear takeover

Pretoria, Gauteng, SA – The Tribunal has approved the merger in terms of which OMPE GP IV (Pty) Ltd (in its capacity as a partner of OMPE Fund) intends to acquire control in Footgear Holdings (Pty) Ltd.
       OMPE Fund controls MoreCorp which is active in the retail for the provision of golf and cycling footwear, whereas Footgear is a retailer of general and casual footwear.
       The Commission, in its assessment of the merger, concluded that no competition or public interests concerns arise from this merger.

They Said It

"Your computer has a Woolworths virus...like all of us have." - Somewhat enigmatic comment from a component supplier in response to the newsletter error last week in which the SENS text referring to Woolworths was left out. When asked to explain, he wrote: "Woolworths stuffs people around."

"Rabin is on the mend, we’ve patched him up and sent him straight back to the trenches. We are just glad to hear that everyone had a good time." - Sew Solutions director Rajesh Raghunandan, referring to his fellow member Rabin Nagesar, who fell ill on the day the company had the official opening of its new Pinetown premises. He was unable to join the friends and customers Sew Solutions had sponsored to attend a show at the Barnyard Theatre in Durban.

Eric Falkow query

Seeing Darryl Austin in "In Memoriam", it reminded me of his agent Eric Falkow. Does anyone know where Eric is today? - Glen Mitchell, Senior Buyer - Footwear & Luggage, Shoprite-Checkers

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 09/08: Hides & skins prices

Hides: R1.58/kg. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. Skins: Dorper R28.75/skin.

15/08:19??: Bob McDonald, retired, formerly Budget Footwear [closed], Durban.
16/08/1957: Paul McMillan, Reflex, George.
17/08/1939: Mike di Lembo, Villani Shoes, Johannesburg.
17/08/1959: Berkly Lupton, Apeco, Johannesburg.
17/08/1972: Alistair Watt, Bresan Footwear, Pietermaritzburg.
18/08/19??: Robbie Blom, Leisure Holdings, Durban.
18/08/1958: Mike Wallace, agent, Cape Town.
18/08/1961: Braam Pretorius, ?, formerly Watson Shoes, Great Brak River.
18/08/1971: Rooksana Moosa, Mozak Shoes, Amanzimtoti.

In Memoriam this week

15/08/2011: Geoffrey Leonard Keane-Murphy (b. 08/03/1927), consultant, Durban.
15/08/2011: Newton Wade (b. 16/06/1925), Panama Shoes [closed], Durban.
15/08/2015: MH Moosaji, Trendsetters, KwaDukuza.
16/08/1997: Ed Aubin, agent, Port Elizabeth.
16/08/2012: Margaret Jordaan (b. 15/01/1931), Centra-Cast, Durban.
17/08/2016: Alan Sykes (b.17/10/1945), Western Tanning [now Mossop Western Tanning] and Corium [closed], Wellington.
18/08/2016: Christian Meyer (b. 16/12/1936), Jack & Jill [closed], Port Elizabeth.

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:
Bata Kenya, Limuru, Kenya: http://batakenya.com/
Bata Uganda, Kampala, Uganda: https://www.facebook.com/BataUgandaFans/

Contact us

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

Next newsletter: August 19, 2019.

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