S&V Weekly Newsletter Vol.6 No.03, January 20, 2020
This Newsletter is sponsored by SAFLIA
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Retail last week
A brighter picture
"January so far has been better than last year. In the 9 years I've been with Levinger's, 2018 was the worst, and we had to tighten our belts with non-performing stores. This year has been positive, and we will be rolling out more stores, including a factory and branch in Mpumalanga. We're still predominantly in Gauteng, with 74 stores, but we also have stores in the Western Cape, Limpopo and KZN. Our lower LSM offering, VIP Dry Cleaners, which offers all our services, is a year old, and we have 7 of those." - Yadir Mooloo, MD, Levinger's Dryclean & Shoe Clinic, Johannesburg, Gauteng, SA. Shoe repair, key cutting and dry cleaning chain.
"School wear has been going well. It's hard to compare with last year, which was a much shorter trading period, but overall we're satisfied. I don't know how fashion will go, but I expect it to be a challenging year. However, we have adapted to trading without some brands. When we started Le Mans, many brands wouldn't supply us because they already had their stockists here. When we bought Giorgio, it came with a number of brands, but we aren't reliant on any one supplier." - Yusuf Nakooda, member, Nakooda Stores cc, KwaDukuza, KZN. Independent, 2 stores, men's outfitter and school wear.
"Not bad at all. We've had a very good back-to-school run." - Maon Saxe, London Shoes, Cape Town, W Cape, SA. Family footwear, 4 stores.
FUBU re-launch targets sub-Saharan Africa
Johannesburg, Gauteng, SA (January 18, 2020) – Richard Dixon is "managing the re-launch" of fashion lifestyle brand FUBU into sub-Saharan Africa (SSA) from autumn/winter 2020.
In a release over the weekend, he said "exploring the wider territories of SSA with selected retailers, and limiting distribution to retail, will be the brand's key focus".
"Growing the brand beyond South Africa and its immediate neighbours will give it scale and grow the brand's consumers, rather than saturating distribution in overtraded retail environments - more customers in a bigger territory with fewer retailers is where I see it."
He said FUBU "fits right into sub Saharan Africa, bringing unique appeal, quality, style and affordable prices".
He urged interested retailers to contact him "urgently to secure the brand's limited merchandise offering for autumn winter 2020". - +27 (0)87 808 6691, +27 (0)72 333 8527, richard@fubu.co.za www.fubu.co.za Instagram: fubusouthafrica
Movements
Cape Town, W Cape, SA – In a restructuring within the Ares Holdings group, Andrew Kalis has moved from GM of Crocs SA to national golf manager for Under Armor in Apollo Brands. Shaakira Isaacs has been appointed brand manager of Crocs SA.
Pinetown, KZN, SA – Greg Uys has joined the PMC Group as CEO. Former strategy & development manager Andreas Horvath has emigrated to Austria.
Stock Exchange News Service (SENS)
Woolworths - succession of Group CEO
Cape Town, W Cape, SA (January 14, 2020) – Further to previous communications around the selection of a successor to the Woolies Group Chief Executive Officer ("Group CEO"), the Board announced that Roy Bagattini has been appointed as the new Woolies Group CEO and an executive director, with effect from 17 February 2020. Ian Moir, the Woolies Group CEO will step down from his position as Group CEO and executive director with effect from 16 February 2020.
In order to facilitate a smooth transition, Ian will be working closely with Roy and will also continue in his role as acting CEO of David Jones.
Truworths - trading update
Cape Town, W Cape, SA (January 15, 2020) – Retail sales of Truworths International Ltd. (the Group') for the 26-week period ended 29 December 2019 (the current period') increased by 1.2% to R10.6 billion relative to the R10.5 billion reported for the 26-week period ended 30 December 2018 (the prior period').
Account sales comprised 52% (2018: 51%) of Group retail sales for the current period, with account sales increasing by 4.3% and cash sales decreasing by 1.9%, relative to the prior period.
Retail sales for Truworths Africa (being the Group, excluding the UK-based Office segment and comprising mainly of the Truworths businesses in South Africa) increased by 2.7% to R7.8 billion relative to the prior period's R7.6 billion, with account sales increasing by 4.3% and cash sales decreasing by 1.2%. Account sales comprised 71% of these retail sales (2018: 70%). Trading space increased by 1% relative to the prior period and is expected to increase by approximately 1% for the 2020 financial year. Product inflation averaged 1.1% for the current period, while like-for-like store retail sales increased by 1%.
Gross trade receivables in respect of the Truworths Africa debtors book (relating to the Truworths, Identity and YDE businesses) were at R6.8 billion (2018: R6.4 billion), while the number of active accounts increased by 3.5% to 2.8 million. Active account holders able to purchase and overdue balances to gross trade receivables were at 85% (2018: 86%) and 10% (2018: 10%) respectively.
Retail sales for the Group's UK-based Office segment decreased in Sterling terms by 3.3% to P151 million relative to the prior period's P157 million. In Rand terms, retail sales for Office decreased by 2.6% to R2.8 billion. Online sales contributed approximately 34% of retail sales for the current period. Trading space for the Office segment decreased by 7.4% relative to the prior period and is expected to decrease by approximately 6% for the 2020 financial year.
The Group continued to experience challenging trading conditions in both its main markets. Low economic growth, high unemployment, load shedding, modest increases in negotiated wages and higher average fuel and utility prices contributed to low consumer confidence and constrained spending in South Africa, while Brexit uncertainty combined with continued pressure on store-based retailing continues to negatively impact the UK economy.
Shareholders are advised that this trading update does not constitute an earnings forecast, that the financial information provided herein is the responsibility of the directors, and that such information has neither been reviewed nor reported on by the Group's external auditors. The Group's interim results for the 26-week period ended 29 December 2019 are scheduled for release on or about Wednesday, 19 February 2020.
TFG - trading update
Cape Town, W Cape, SA (January 17, 2020) – TFG enjoyed a solid November/December trading period, which included a record high Black Friday for the Group and which is increasingly measured against the high base that has been created over the past several prior comparative periods. Subsequent trade continues to be in line with management expectation. The Group's consolidated turnover grew 5,9% for the nine months to 28 December 2019 when compared to the same period in the previous financial year with performances in line with expectations in all regions, apart from TFG Australia, which continued to exceed expectation.
TFG Africa showed resilience across all merchandise categories and despite the high base of the past several years, produced turnover growth of 5.9%. This included a new record high Black Friday performance, which helped to offset the negative impact of the load-shedding experienced in South Africa during December. Same store turnover grew by 4.1%. Cash turnover grew pleasingly by 11.2% whilst credit turnover declined by -1,0% as a result of the Group's prudent approach to credit in the current constrained economic environment.
TFG London's turnover declined 1.1% against the backdrop of a very subdued and disrupted environment, characterized by large store format closures and the accelerated restructuring of the department store model by owners and lenders, as well as continued footfall declines on the high street amidst Brexit uncertainty and generally poor retail sales being reported for the festive season period. TFG London's turnover, excluding concession turnover from House of Fraser (an independently owned UK department store placed under administration in August 2018), grew by 1,8%^ which is positive given these circumstances and the fact that this result was achieved without the sacrifice of margin.
TFG Australia's turnover grew 11.4% off an already high base. Excluding the G- Star RAW franchise stores disposed of in December 2018, TFG Australia's turnover grew by 15,3%^, with a record high Black Friday performance in November. Shareholders are advised that this trading update has not been reviewed or reported on by the Company's external auditors.
Pro forma information: Pro forma management account information for TFG Australia and TFG London were used in this announcement for illustrative purposes only to provide an indicative turnover growth for these business segments. In TFG Australia, turnover for the period 1 April to 5 December 2018 relating to the G-Star RAW franchise stores were removed as if the disposal of these stores took place effective 31 March 2018.
In TFG London, all turnover transacted through House of Fraser were removed to illustrate the impact of House of Fraser going into administration during August 2018. This pro forma information, because of its nature, may not be a fair reflection of the Group's results of operations, financial position, changes in equity or cash flows. There are no events subsequent to the reporting date which require adjustment to the pro forma information.
Richemont - trading update
Geneva, Switzerland (January 17, 2020) – Richemont released a trading update for the third quarter ended 31 December 2019.
Financial highlights: * Sales in the quarter increased by 6% at actual exchange rates and by 4% at constant exchange rates compared to the prior year period, both including and excluding Online Distributors
* Strong growth in Europe and the Americas; Asia Pacific up low-single digit, with strong double digit increases in China and Korea more than offsetting a marked contraction in Hong Kong SAR, China - all at actual exchange rates
* High-single digit progression in retail and online retail sales, outperforming muted wholesale sales growth at actual exchange rates
* Sales increases across most business areas at actual exchange rates, led by robust performance from the Jewellery Maisons
Note: Richemont is a multinational with South African roots. It's primary listing is on the Swiss Stock Exchange and its secondary listing is on the JSE. Its businesses are dominated by jewellery and watch brands, but include luxury clothing, footwear and leather goods companies Alaïa, Chloé, Dunhill, Peter Millar, Purdey and Seriapan.
Mr Price - trading update
Durban, KZN, SA (January 17, 2020) – During the third quarter (29 September 2019 to 28 December 2019) of the financial year ending 28 March 2020, the Group recorded growth in retail sales and other income (RSOI) of 3.5% to R7.4bn over the corresponding period in the prior year.
Corporate-owned and franchise stores generated total retail sales of R7.0bn, an increase of 3.3%. In October, the group gained market share despite retail sales growth being muted at 0.3%. Trade was affected by a shift in school holidays into September and the Rugby World Cup. Markdown activity was required to manage stock levels going into peak season, negatively impacting gross margin % in the month.
The group continued to gain market share in November (the latest period for which RLC data is available), an increasingly key trading month because of Black Friday. This has changed consumer spending habits prior to Christmas. Business activity in key weeks in December was materially affected by stage six rolling power blackouts and prolonged periods of torrential rain in the inland areas, partially diluting the anticipated impact of the extra week of school holidays.
The combined retail sales growth of these two months was 4.7%, with gross margin % in line with the same period last year. In May 2019, the group communicated that improvements in Mr Price Apparel's high summer performance was expected due to internal initiatives undertaken. The division has reported enhanced retail sales growth from -1.2% in H1 FY2020 to 3.2% in Q3 FY2020. The division's sales increased by 4.6% over the combined November and December period, with an improved gross margin %. The division launched its first beauty range, Scarlet Hill, in an initial 40 stores, with results exceeding expectations.
The Home businesses have felt the effect of lower growth in household expenditure, particularly on discretionary items. Despite this, both divisions continue to find opportunities to deliver superior value to their customers. South African retail sales grew 3.9% to R6.4bn. Store sales were up 3.7% and online sales up 17.4%. Non-South African corporate owned stores sales decreased by 1.1% to R500m. Excluding Australia, Poland and Nigeria (markets either discontinued or with limited stock flow) sales increased 2.5%.
Trading space increased 2.0% on a weighted average basis and 2.6% on a closing basis. Cash sales were up 4.1%, constituting 85.2% of total sales. Credit sales grew 0.2%. Other income grew by 6.5% to R438m supported by double digit growth in mobile and cellular. The in-store cellular kiosks are now in 259 stores.
The group is very focused on effective inventory management and stock growth at the end of the period was within the targeted low single digit range. Consumers continue to be constrained, highlighted by the BER Consumer Confidence Index remaining negative at -7 index points in Q4 2019. The group sees this as an opportunity to continue gaining market share and building on the improved performance in Q3, by offering quality merchandise at everyday low prices. In line with the strategic intent to entrench market positioning and to be viewed by consumers as the people's value champion, retail prices were maintained at last year's levels, as evidenced by RSP inflation at 0.0%. This had the desired impact of increasing unit growth by 3.6% and importantly by 5.3% in Mr Price Apparel, the group's largest division.
For the period 29 December 2019 to 15 January 2020, not included in the analysis above, group retail sales momentum continued to build positively at an improved gross margin % compared to the same period last year. The figures and information contained herein do not constitute an earnings forecast and have not been reviewed and reported on by the company's external auditors.
They Said It
"It’s a New Year and even Better…….. A BRAND NEW DECADE!" - Jane Moodley, Froggie.
The 2020 S&V Directory - Order now
The 2020 edition of the S&V Directory is in production and will be available in January. The online version is available immediately at R450 for 12 months' access.
2020 Trade Fairs Another essential service from S&V
Please note that we have updated most 2020 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/
|
Euro € |
GBP £ |
US $ |
CNY ¥ |
2020/01/04 |
R15.97 |
R18.71 |
R14.31 |
R2.05 |
2020/01/11 |
R15.97 |
R18.76 |
R14.36 |
R2.07 |
2020/01/18 |
R16.04 |
R14.47 |
R14.47 |
R2.10 |
Note: For previous rates, see HERE
ABSA Agri Trends: Hides & skins prices
Hides: The current average hide price is R1.42/skin. The current price is 2.9% higher than prices were a month ago and the current hide price is 64.1% lower than prices were a year ago. The local market remains under pressure. Global slaughter continues at a good rate, with global hide stocks also rising. Locally week on week prices were supported by the re-opening of the automotive plants and lower slaughter numbers. - Conce Moraba, agricultural economist, Absa group.
Hide & skin price progression |
Date |
Hides/Kg |
Dorper/Skin |
Merino Skin |
2020/01/03 |
1.38 |
|
|
2020/01/10 |
1.42 |
|
|
2020/01/17 |
1.42 |
28.69 |
|
Note: For previous prices, see HERE
23/01/1943: Pat Ward, left industry, ex-RPM Shoes [closed], Durban.
23/01/1944: Gerrie Botha, Steps Shoes @ Barclay, Pretoria.
24/01/1937: Dan Naidoo, Togo Shoes, Pietermaritzburg.
24/01/1969: Yolander Lotter, Comfy Feet Shoes, Jeffrey’s Bay.
25/01/1951: André Pelser, retired, formerly Mossop-Western Leathers, Wellington.
25/01/1973: Reggi Xaba, Zetu Shoes, Durban.
26/01/1958: André Compion, PMC, Pinetown.
26/01/1962: PT Harrower, C&B Harrower Agencies, Johannesburg.
26/01/1973: Lou Harvey, Lou Harvey Company, Durban.
26/01/1982: Adeeb Moosa, Deebo Sales, Cape Town.
26/01/19??: Jeetesh Ambaram, JFK Trading, Durban.
In Memoriam this week
20/01/2010: Johan Bester (b. 08/11/1936), ProGlove, King William’s Town.
22/01/1997: Charles Lintner, Bata SA, Pinetown.
25/01/2014: Barry Kruger (b. 20/06/1944), Richleigh Shoes [closed] and Corrida Shoes, Pietermaritzburg.
26/01/2006: Victor Ronald (Vic) Van Der Weele (b. 21/10/1916), SA Mercantile [closed], Cape Town.
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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:
Buck 'n Bass Taxidermy cc, Durbanville, W Cape, SA. Taxidermy.
Buckman, Hammarsdale, KZN, SA. Tanning chemicals supplier.
Classified Adverts
Sales Rep seeks position
Robbie Thorne, with 30 years' sales experience in the footwear industry, seeks a sales position. Equally at home with components and finished footwear. Whatever your product, I will do it justice. Please call 072 633 2258.
Contact us
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Next newsletter: January 27, 2020.
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