Publisher of leading trade magazines for the Footwear, Leather-goods, Leather & PPE industries

S&V Weekly Newsletter Vol.5 No.34, August 26, 2019

This Newsletter is sponsored by SAFLIA

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


Retail last week

Comment from 4 retailers on Saturday
"This last week has been pretty tough, but July and the first 2 weeks of August were good, which is normally the case. Our winter sale is the last week of July and the first week of August, but generally the momentum carries through to the end of August. We'll have to see whether it picks up next week again. May and June were tough, and some departments battled more than others." - Marko Thiart, audio visual buyer and floor manager, Friedman & Cohen, Cape Town, W Cape, SA. Department store, 1 store, apparel, men's and women's footwear, home textiles, and other departments.

"The first 4 days were a bit slow. Friday and Saturday have been quite good. The first week of the month was fine, but then it slowed until this weekend. The year so far has been down on last year." - Yogesh Narotam, member, Friends, Rustenburg, NW Province, SA. Independent, 1 store, men's outfitter and men's and women's footwear.

"Only the first week of the month is good - that's the trend now. By the third week - this week - it's terrible because people have run out of money. The cost of living has become very high, and there's not much left over for footwear and clothing. There's no sign that the economy will improve anytime soon." - Kiran Govan, proprietor, Gaaman Outfitters, Durban, KZN, SA. Independent, 1 store, men's outfitter.

"It's been a bit slow. I expect it to be better next week, with month end. The year overall has been down on last year." - Ahmed Gattas, Gattas Trading Store, Pretoria, Gauteng, SA. Independent, 1 store, workwear and safety footwear specialist.



Stock Exchange News Service (SENS) release

Shoprite final results June

Cape Town, W Cape, SA (August 20, 2019) – Sale of merchandise increased by 3.6% R150.4 billion (2018: R145.1 billion), gross profit grew 1.8% to R35.3 billion (2018: R34.7 billion) whilst operating profit was 8.2% lower at R6.9 billion (2018: R7.5 billion). Profit attributable to owners of the parent was recorded at R4.3 billion (2018: R5.2 billion). Furthermore, headline earnings per share decreased by 19.6% to R780.8 cents per share (2018: R971.4 cents per share).

Dividend number 141: The board has declared a final dividend of 163 cents (2018: 279 cents) per ordinary share, payable to shareholders on Monday, 9 September 2019. The dividend has been declared out of income reserves. This brings the total dividend for the year to 319 cents (2018: 484 cents) per ordinary share.

Group prospects and outlook: The Group will adopt IFRS 16: Leases effective from 1 July 2019. The expected impact is outlined in note 16 of the summary consolidated financial results included in this announcement.
       With respect to Non-RSA, persistently challenging trading conditions in the year ahead are likely to hamper our ability to return to profitability. Angola is expected to be declassified from the list of hyperinflationary countries in the year ahead and, therefore, we anticipate that we will not be required to report in accordance with IAS 29 in the 2020 financial year. Post year-end, we have maintained our Supermarkets RSA sales momentum with Usave in particular reaping the benefits of our restored in stock position. Regarding the selling price inflation outlook for Supermarkets RSA, we’ve seen a slow increase in recent months to the 2.5% level currently.
       We've entered 2020 bolstered by our success over the past six months with the knowledge that our continued operational focus will be combined with consolidating our financial position by reducing inventories, critically assessing capital expenditure and where appropriate, selling selected assets to redirect capital towards future growth projects. We are confident that following our system replacement, the Group is future fit and we look forward to achieving returns from a smarter Shoprite. The next few months will also see us operationalise key innovation projects that will unlock future alternative revenue streams and enhance our digital presence in the new race for reach.



Steinhoff Investment - preference dividend

Cape Town, W Cape, SA (August 21, 2019) – The board of directors of the Company has declared a gross dividend of 491.15754 cents per share, payable on Monday 14 October 2019 in respect of the period 1 January 2019 to 30 June 2019 ("the preference dividend" ), payable to the shareholders, recorded in the books of the Company at the close of business on Friday 11 October 2019, of the 15 000 000 cumulative, non-redeemable, non-participating, variable rate preference shares issued by the Company ("the preference shares").
       At the date of declaration there were 15 000 000 (fifteen million) preference shares in issue.
       The preference dividend will be payable in the currency of South Africa and will be subject to a local dividend tax rate of 20%. This will result in a net dividend of 392.92603 cents per preference share, unless the preference shareholder is exempt from dividend tax or is entitled to a reduced rate in terms of an applicable double-tax agreement.

Salient dates:
  *Last date to trade cum dividend: Tuesday, 8 October 2019
*Shares trade ex-dividend: Wednesday, 9 October 2019
*Record date: Friday, 11 October 2019
*Payment date: Monday, 14 October 2019

       Share certificates may not be dematerialised or re-materialised between Wednesday 9 October 2019 and Friday 11 October 2019, both days inclusive.



Mr Price trading update

Durban, KZN, SA (August 22, 2019) – During the first four months (18 weeks to 3 August 2019)(the "Period") of the financial year ending 28 March 2020, the group recorded growth in retail sales and other income of 1.1% to R7.5bn over the corresponding period in the prior year ("Corresponding Period").
       Total retail sales, including sales to franchisees, of R6.9bn were 0.5% higher than the Corresponding Period.
       It was communicated at the annual results presentation in May, that the first half of FY2020 was expected to be an extremely challenging trading period. The continued poor retail environment, and a generally strong performance in the base relative to the rest of the market per Stats SA, contributed to the performance in the Period. In addition, internal factors had an impact and are outlined below.
       Consumers continue to be constrained, which is affecting propensity to spend. GDP growth, unemployment, inflation and disposable income remain at levels that are not supportive of growth in the retail environment.
       The corporate store sales performance detailed above reflect some of the external challenges. Despite these factors, group sales excluding Mr Price Apparel were up 4.8%, with these divisions maintaining or improving gross margin percentage.
       South African retail sales increased 0.6% to R6.4bn. Store sales were up 0.2% and online sales up 31.1% to R109.1m. The Mr Price Apparel online channel achieved sales growth of 21.8%, Mr Price Home 40.8% and Mr Price Sport 31.3%. Sales in non-South African corporate owned stores grew 0.3% to R522.3m.
       Group cash sales increased 1.4%, constituting 83.6% (Corresponding Period: 82.9%) of total sales and credit sales decreased 3.5%. The credit environment continues to be weak as indicated by Transunion in their Q2 2019 Consumer Credit Index report and the group does not believe it is currently appropriate to stimulate growth in this channel.
       New store openings and expansions resulted in weighted average trading space increasing 3.0%. Ongoing strategic space rationalisation resulted in net weighted average trading space increasing 1.5%.
       Other income grew 9.4%, to R502.7m. Debtors' interest and fees grew 7.2% to R171.6m. The recent repo rate cut of 25bps will adversely affect interest income for the remainder of the financial year. Insurance revenue of R81.1m decreased 5.2% and cellular and mobile revenue increased 19.4% to R234.6m.
       The most significant challenges were faced in Mr Price Apparel, which constitutes 59.5% of group sales. The core elements of our business model and past success, being category dominance and clarity of offer, were compromised by an imbalance in the shape of the assortment. These same issues were present in H2 of the prior financial period and caused excess inventory carry into winter. Higher than desired markdowns were required over the short winter period, diverting customer spend away from full-price merchandise and materially impacting gross margin.
       The new executive management team has devoted significant time to undertake detailed merchandise process reviews across the business with emphasis on Mr Price Apparel. Clarity on where corrective action was required has been achieved and remedial action has been taken. As communicated in May, it was not anticipated that the effect of these initiatives would impact winter trading, but they are expected to positively influence performance leading into H2.        Group winter inventory was cleared to acceptable levels by the end of the Period.
       Early signs of a performance recovery into spring and summer have started to emerge. Group retail sales in the last two weeks of the Period grew 3.6% (Mr Price Apparel +0.3%) and in the two weeks after the Period to 17 August grew 6.9%(Mr Price Apparel +4.3%) against a strong performance in the Corresponding Period.
       Looking ahead, the trading environment is expected to be challenging as global markets remain uncertain and local economic growth is forecast to be muted in 2019. Despite this, management is optimistic that an extremely talented group of associates, re- focused on entrenching proven disciplines and providing customers with exceptional value, should deliver market share gains, whatever the economic environment.


They Said It

"But you shouldn't be driving at 80." - Chinese supplier to Greenaways Natal's Garth Ribbink, who turns 74 in November. "I told him to xxxx off," Ribbink said. "Cheeky little sod." In fact, he's a wonderful advertisement for the many benefits of staying fit.


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:


Exchange rates


  Euro € GBP £ US $ Yuan Renminbi ¥
05/01/2019 R15.94 R17.79 R13.99 R2.03
12/01/2019 R15.86 R17.76 R13.83 R2.04
19/01/2019 R15.76 R17.85 R13.87 R2.04
26/01/2019 R15.52 R17.97 R13.60 R2.01
02/02/2019 R15.26 R17.42 R13.32 R1.97
09/02/2019 R15.46 R17.66 R13.65 R2.02
16/02/2019 R15.90 R18.15 R14.09 R2.08
23/02/2019 R15.90 R18.32 R14.04 R2.09
02/03/2019 R16.17 R18.77 R14.22 R2.12
09/03/2019 R16.22 R18.79 R14.43 R2.14
16/03/2019 R16.31 R19.15 R14.40 R2.14
25/03/2019 R16.31 R19.02 R14.42 R2.14
30/03/2019 R16.26 R18.90 R14.49 R2.15
06/04/2019 R15.80 R18.36 R14.09 R2.09
13/04/2019 R15.76 R18.24 R13.95 R2.08
20/04/2019 R15.86 R18.33 R14.10 R2.10
27/04/2019 R16.03 R18.56 R14.37 R2.13
04/05/2019 R16.08 R18.88 R14.34 R2.13
11/05/2019 R15.91 R18.40 R14.16 R2.07
18/05/2019 R16.09 R18.32 R14.41 R2.08
25/05/2019 R16.15 R18.32 R14.41 R2.08
01/06/2019 R16.28 R18.41 R14.57 R2.11
08/06/2019 R16.95 R19.03 R14.94 R2.16
15/06/2019 R16.61 R18.65 R14.81 R2.14
22/06/2019 R16.30 R18.24 R14.32 R2.08
29/06/2019 R16.01 R17.88 R14.08 R2.05
06/07/2019 R15.91 R17.74 R14.17 R2.05
13/07/2019 R15.75 R17.57 R13.97 R2.03
20/07/2019 R15.63 R17.42 R13.93 R2.02
27/07/2019 R15.91 R17.68 R14.29 R2.07
03/08/2019 R16.42 R17.97 R14.78 R2.13
10/08/2019 R17.08 R18.34 R15.25 R2.16
17/08/2019 R16.97 R18.58 R15.30 R2.17
26/08/2019 R17.00 R18.74 R15.27 R2.13
Note: For previous rates, see HERE




ABSA Agri Trends 13/08: Hides & skins prices

Hides: R1.57/kg. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies.

Hide & skin price progression
Date Hides/Kg Dorper/Skin Merino Skin
18/01/2019 3.94 33.75 81.67
25/01/2019 2.89 31.11 92.78
01/02/2019 2.83 30.63 87.50
05/02/2019 2.53    
13/02/2019 2.95    
15/02/2019 2.95 25.83 62.01
19/02/2019 2.01    
22/02/2019 2.00 31.88 49.21
26/02/2019 2.04    
01/03/2019 2.04 30.00 45.21
14/03/2019 1.63    
20/03/2019 1.60    
27/03/2019 1.67    
10/04/2019 1.68    
24/04/2019 1.78    
26/04/2019 1.49 32.50  
03/05/2019 1.82    
17/05/2019 2.05 34.00  
21/05/2019 1.72    
24/05/2019 1.72 36.67  
28/05/2019 1.74    
31/05/2019 1.74 32.50 48.75
10/06/2019 1.68 41.90  
14/06/2019   25.83 38.57
18/06/2019 1.68 25.83  
28/06/2019 1.66    
01/07/2019 1.67    
05/07/2019   25.00 38.57
12/07/2019 1.70 24.00 38.75
16/07/2019 1.71    
23/07/2019 1.71    
29/07/2019 1.59    
09/08/2019 1.58 28.75  
For previous prices, see HERE


26/08/1971: Sadia Edries, Rizzo Sales, Cape Town.
27/08/1945: Krish Gangiah, Impact Footwear, Durban.
27/08/1962: Vidrik Thurling, Thurling Investments, Cape Town.
28/08/1947: Kathy Graham, retired, formerly Bagshaw, Port Elizabeth.
28/08/1964: Maon Saxe, Lonshoe Holdings, Cape Town.
28/08/1969: Craig Munro, ? formerly Crafcor Hart Hides (closed), Pietermaritzburg.
29/08/1961: Steve Miller, Queue, Cape Town.
29/08/1976: Minesh Gangiah, Impact Industries Footwear Manufacturers, Durban.
29/08/????: Indira B Ambaram, JFK Trading, Durban.
01/09/1941: Stan Kotkin, retired, formerly Footwear Trading (ceased trading), Johannesburg.
01/09/1942: Judy Vincent, Saddler Belts & Leathercraft, Durban.
01/09/1971: Antonella Florio, Vanity, Ladybrand.


In Memoriam this week

27/08/2006: Keith Barkus (b. 08/04/1954), agent, Durban.
28/08/1997: Richard Denton (b. 24/06/1914), Ricmar group [closed], Durban.
28/08/2013: Tony Denton (b. 06/03/1943), Ricmar group [closed], Himeville.
30/08/1997: Neville Socher, Medicus agent.
01/09/2012: Mike Cromhout (b. 06/02/1947), agent, Cape Town.

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:
Bay Tool & Die Makers. Rubber component manufacturer, Port Elizabeth, E Cape, SA:
BBF Safety Group, Pinetown, KZN, SA, PPE manufacturer:


Contact us

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Next newsletter: September 2, 2019.

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