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

S&V Weekly Newsletter Vol.6 No.14, April 6, 2020

This Newsletter is sponsored by SAFLIA

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

 

The April editions of S&V Footwear & Leather Goods and S&V African Leather will appear on Wednesday and Friday this week respectively, a week later than planned. Apologies for the delay. Contacting people has been a challenge.

 

Retail: Planning for the restart

"If there's no extension of the lockdown, we've taken the decision to pay our staff in full. We expect consumers to have a bit to spend, because they won't have been able to spend over this period. Aside from our stores, we have a fair amount of commercial property, mostly strip malls. Some of the tenants - especially national retailers - are taking advantage of the situation by refusing to pay, which isn't fair, because these are bonded properties. We'll have to see what the legal position is and what concessions the banks make for commercial properties as opposed to domestic properties. Our smaller tenants, on the other hand, ask for a bit of an extension, and that's fair enough." - HK Bawa, director, All Star Fashions/Bawa's/Bawa's Sport, Vereeniging, Gauteng, SA. Sport fashion, 4 stores.

"I'm a sole proprietor of a small business, so I'm worried about a couple of things - whether this lockdown will be extended, and whether consumers will have money to spend when we are allowed to reopen. I've decided to close one of my two shops, which wasn't doing very well anyway because people in that centre buy cheaper shoes, and rents are so high. On the other hand, I don't have debt, so I should survive." - Anca Facauaru, proprietor, Anca Shoes, Benoni, Gauteng, SA. Independent, men's and women's shoes.

"We don't yet have a plan because we don't know if we will be allowed to reopen when they said we would. We still hope that we will get back to normal from day 1, but we know that's very unlikely." - Ash Parekh, manager, Bachelor's Classic, Umhlanga, KZN. Men's outfitter, 2 stores.

"We're a surf shop, so until the beaches reopen, we won't have a business anyway. We also import, for ourselves and to wholesale, because the extra margin helps a lot, but with the exchange rate as it is now...who knows. It's quite scary." - Kim Abbott, proprietor, Absolute Surf, Umhlanga, KZN, SA. Beach and surf specialist.

"We'll just have to play it as it comes. We ordered a lot of stock for winter, and there's a ship in Cape Town harbour which can't offload, and another one on the way. The stock may arrive very late. There's a lot of uncertainty out there, and we have to address people's concerns. However, I've decided not to be negative or fearful, and just to do the best I can. We're in contact with our customers through our online retail to keep the awareness going." - Alyssa Bellingan, member, Ally Shoes, Hermanus, W Cape, SA. Women's shoe specialist, comfort and fashion, small and large sizes.

 

 

Covid-19: More DTIC notifications

Pretoria, Gauteng, SA – Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), last week forwarded more announcements.
       These announcements covered imports and exports, southern African cross border movements, and a call by a group called Business for SA’s Public Health Workgroup which is encouraging all businesses with stocks of some categories of PPE "to divert their stocks...for use in the national healthcare sector".
       Dr Irkhede's contact details are 0663012044, jirkhede@thedti.gov.za.
       The announcements are summarised below:

Borders and trade
2020 03 25 - SARS Customs & Excise will ensure the following capabilities remain available:
- Licensing and registration for the manufacturing of essential products such as sanitisers.
- A minimum service capability will be available at all Customs offices.
- The processing of declarations will proceed as normal.
- Physical inspection of goods will continue as normal and priority will be given to essential goods. Other inspections will continue on an appointment basis.
- Border operations will proceed as normal with limited staff.

Positions of neighbouring states cross border movement:
- Botswana: Noncitizens should not be allowed except for those delivering essential commodities.
- Eswatini: Only goods and cargo as well as returning citizens and legal residents will be allowed through.
- Namibia: South African borders, including air travel, to remain open to serve as points of entry for Namibians returning home and exit points for visitors from Namibia, and to facilitate trade between the two countries.
- Lesotho: Still awaiting an announcement.
- Mozambique: All travellers from all countries will be quarantined for 14 days (mandatory).
- Zimbabwe: Our borders will remain open for commercial business. There is a border closure for human traffic except for returning residents who will be quarantined for 14 days.

Draft SADC Guidelines to Member States on Cross Border Transport during the Covid-19 Pandemic

3.1 Cross Border Freight Truck Operations
Only trucks/vehicles with the following cargo, goods and services will be allowed to operate in interstate operations in order to ensure continuity of supply chains:
i (i) Food;
ii (ii) Medicines;
iii (iii) Fuel;
iv (iv) Agricultural supplies;
v (v) Security, emergency and humanitarian relief services; and
vi (vi) Other goods and services as may be agreed among and between Member States.

3.2 Cross Border Road Passenger Transport
Inter-State mass movement of persons by buses/minibuses or other vehicles to be suspended for defined periods except for the following exemptions to be granted against
(i) Citizens and residents returning to home countries / places of residence;
(ii) security, emergency and humanitarian relief services as may be agreed between Member States; and
(iii) Transportation of work crews and teams under special arrangements between Member States (e.g. teams working on cross border transport projects such as Kazungula Bridge and OSBP).


Ihlobo Footwear
The DTI has written to liquidator Berrangé Inc. to say that because of the lockdown, SA manufacturers were unable to view the equipment and make offers by April 3, and therefore he requested them to extend the deadline to May 1.


Urgent call for businesses to divert PPE inventories to national healthcare sector
Press release from Business for South Africa Public Health Workgroup (March 30, 2020)
Business for SA’s Public Health Workgroup is calling on all companies, especially those in lockdown, to urgently divert their stocks of personal protective equipment (PPE) for use in the national healthcare sector. The PPE is critically needed to protect frontline doctors and healthcare workers, and to keep them healthy in their fight against the pandemic.
Contact: Covid19supplies@businessresponsecovid19.co.za
List of PPE required:
- Masks (N95 Grade)
- Surgical masks
- Latex-free gloves (do not need to be sterile); preferably nitrile
- Plastic aprons
- Visors and goggles for eye protection
- Gowns and suits
- Overshoes.
Stavros Nicolaou, who leads the Public Health Workgroup for Business for South Africa says: “As we head deeper into the COVID-19 crisis, we are going to need all the masks, gloves and protective equipment we can source to ensure the healthcare sector has a ready and ongoing supply. We appeal to all South African businesses, whether large or small, to unlock their stocks in the best national interest.
       “Critical to turning the tide against the COVID-19 pandemic is ensuring that our frontline doctors and healthcare workers are protected from the virus, to ensure South Africa’s most effective response.
       This effort will go a long way in keeping them productive in the clinical setting.”
       Since January, stocks of PPE have been severely impacted by a global need for products to address the COVID-19 pandemic. This has been exacerbated by export restrictions, disruptions of logistics systems and escalating costs.
       The Business for South Africa Public Health Workgroup is working closely with Government’s PPE Division to consolidate all national health requirements in respect of PPE. Besides this urgent call to companies, the workgroup is driving efforts to boost local manufacturing and production where possible, and also expanding the sourcing from global suppliers. Securing stocks from companies that already have these available, especially those that are not currently using them, will provide much needed immediate assistance.
       Throughout South Africa, there are storerooms of PPE that could be used as part of the emergency response. This includes stocks that are held by companies in the manufacturing, forestry and agriculture, construction, mills, spray painting, mining and signwriting industries, amongst others.
       “In almost every sector, there are companies that have stocks of protective gear that they issue to employees to protect them in the workplace. These are the stocks that are urgently required to be fed into the national health efforts to combat and manage the spread of COVID-19,” says Nicolaou.
       We urge all company owners, store keepers, supervisors, operators, and especially occupational health and HSE managers, who have access to PPE stocks, to contact us with the following information:
- What stocks do you have?
- How many units of each?
- Which manufacturer’s brand?
- Where are they (i.e. where in SA)?
- Are they sterile or non-sterile? (we will sterilise).
Please send the information to the following contact:
Covid19supplies@businessresponsecovid19.co.za
Once we receive your critical information, we will revert back to you with the necessary logistical arrangements.


Guidelines for application: Debt Relief Finance Scheme
1.1 Benefitting SMEs
Businesses which are negatively affected, directly or indirectly, due to the Coronavirus pandemic to mitigate against job losses and the expected harsh economic impact.
1.2 Qualifying Criteria:
a. The business must have been registered with CIPC by at least 28 February 2020;
b. Company must be 100% owned by South African Citizens;
c. Employees must be 70% South Africans;
d. Priority will be given to businesses owned by Women, Youth and People with Disabilities;
e. Be registered and compliant with SARS and UIF;
f. Seda will assist micro-enterprises to comply and request for assistance must be emailed to debtrelief@seda.org.za; whereas small and medium enterprises must ensure own compliance;
g. Registration on the National SMME Database – https://smmesa.gov.za/
h. Proof that the business is negatively affected by COVID-19 pandemic;
i. Complete the simplified online application platform;
j. Company Statutory Documents;
k. FICA documents (e.g. Municipal accounts, letter from traditional authority);
l. Certified ID Copies of Directors;
m. 3 months Bank Statements;
n. Latest Annual Financial Statements or Latest Management Accounts not older than three months from date of application – where applicable;
o. Business Profile;
p. 6 months Cash Flow Projections – where applicable;
q. Copy of Lease Agreement or Proof ownership if applying for rental relief;
r. If applying for payroll relief, details of employees - as registered with UIF and including banking details – will be required as payroll payments will be made directly to employees;
s. SMME employers who are not compliant with UIF must register before applying for relief;
t. Facility Statements of Other Funders;
u. Detail breakdown on application of funds including salaries, rent etc.
1.3 Application Process
a. Register on https://smmesa.gov.za/
b. Complete online Application Form (to be released on Thursday, 02 April 2020);
c. Upload Required Supporting Documents
info@dsbd.gov.za / info@mybindu.org.za 0860 663 7867 or 0860 ONE STOP
There are more details available through https://www.gov.za/coronavirus/support-business#debtrelief on:
Debt Relief Finance Scheme
Business Growth Resilience Facility
Tax measures to combat the COVID-19 pandemic


Tax Relief
Extracts from the SARS Commissioner’s statement on revenue collection 2020
There are a few important drivers of revenue performance for the coming year:
1. The economic outlook, exacerbated by the recent downgrade of South Africa to sub-investment grade, remains weak and will depend on:
a. The structural reforms by the whole of government to improve our overall fiscal framework and redirect resources to build the much needed productive capacity that will grow the economy, create new businesses, expand employment opportunities and increase domestic consumption.
b. The extent and eventual impact of the most threatening existential risk of our generation, COVID-19, and the final economic, human and social cost that the virus will extract - at this stage, slowing down the rate of infection...appears to be our only hope to defeat [it].
c. Government, and all social partners' collective resolve and ability to keep the wheels of the economy going, albeit significantly slower pace to save jobs and extend a lifeline to the most vulnerable and exposed in our society.
d. The ongoing work to rebuild SARS and improve the culture of voluntary compliance to ensure we collect the tax and customs revenue and facilitating legitimate trade across our borders.

In this regard, SARS has prepared to implement the tax measures proposed by government which will see a significant relief to compliant taxpayers:
1. To employers through the additional R500 subsidy per qualifying employees who earn less than R6500 per month.
2. To SMMEs with turnover up to R50 million who are given some cash flow relief to defer 20% of their employees' tax liability for each period from 1 April 2020 to 31 July 2020, and
3. To SMMEs with turnover up to R50 million to defer 35% of their first provisional tax payments from 1 April 2020 to 30 September 2020.


FP&M SETA

Extract from a communication to all stakeholders & FP&M Seta organizations & companies re: extension of deadline for mandatory and discretionary grant applications to 31st May 2020 for the 2020/21 financial year.

The FP&M SETA Board and Management has approved the extension deadline for all Mandatory and Discretionary Applications on the FP&M SETA electronic indicium system to 12:00 midnight on 31st May 2020. This means that all FP&M SETA stakeholders and employers can submit their WSP/ATR and/or Discretionary Grant Application on or before the 31st May 2020 midnight. The implication of this is that stakeholders and employers will no longer be required to apply individually for extension. Whilst this provides relief for employers under the current circumstances, employers are encouraged not to leave their submissions too close to the due date as there will be no other extension provided beyond the 31 May 2020.


Appeal from Dr Irkhede to the CEO of the Banking Association of SA
We acknowledge BASA announcement1 that BASA will have ongoing discussions with the National Treasury and the SARB, among others, to evaluate the possible further relaxation of regulations, if necessary.
       We appreciate that BASA strongly encourages all customers to continue to meet their banking and financial services obligations wherever possible. Customers in good standing – those that were up to date with commitments and have historically conducted their relationship with banks responsibly – who experience financial challenges as a result of Covid-19, should contact their banks who will, on a case-by-case basis, assist with appropriate solutions. These solutions could include suitable payment deferrals, the restructuring of debt, the provision of small and medium enterprise (SME) bridging finance and liaising with government and others who are providing additional support mechanisms.
       We specifically appreciate that particular attention will be given to those sectors likely to be most vulnerable in the current circumstances and that the banks are investigating ways to assist customers on an industry and collaborative basis wherever possible.
       Please note that majority of the manufacturers in the most labour intensive Textile, Clothing, Leather and Footwear (TCFL) manufacturing priority sectors in South African manufacturing economy are currently experiencing business continuity risks. This is because of the unprecedented lock down. Further the majority of the COVID 19 funding support by the State through the Development Financial Institutions (DFI’s) is only for manufacturers in the essential goods and services. The TCLF industry does not qualify for this support, except for the TERS from UIF. The DTIC requested industry members to develop post lock down recovery plans and, individually, they have made the following recommendations for the commercial banks to support industry with:
1. The bank’s collateral conditions be relaxed by 20% to 30% on the existing and additional credit facilities.
2. Medium term debtor finance on the deferred debt payments by the local retailers.
3. Restructuring of interest and instalments on current term loans.
4. Medium term sub-prime lending.
Amongst the main cost drivers in TCLF sectors is a labour cost and these sector generates significant social cost (remuneration to employee) for 145000 direct employee and almost equal number of employee in the indirect and informal employment.
       Through the Clothing Textile Competitiveness Program, the DTIC has supported these sectors by approving R 8.3 billion from 2010 to 31st March 2020 to stabilize and capitalize the TCLF industry and the DTIC is committed to support further.
       We will highly appreciate if you urgently propose to the BASA Board that the labour absorbing TCLF priority sector be considered as the most vulnerable manufacturing sectors in the South African economy and the BASA Board considers and approval above recommendations as a medium term post COVID 19 lock down support.
       Your urgent response to the request will be highly appreciated.

Cas Coovadia of BASA acknowledged the request on 1st April 2020 and indicated that he will discuss with his Board and revert.

Regulations on Competition Tribunal rules for COVID-19 excessive pricing complaint referrals
https://www.greengazette.co.za/documents/regulation-gazette-43205-of-03-april-2020-vol-658-no-11080_20200403-GGR-43205

 

Stock Exchange News Service (SENS)

Rex Trueform - Trading statement

Cape Town, W Cape, SA (March 30, 2020) – Shareholders are advised that:
1. Rex True’s earnings per share (“EPS”) will decrease by 54.0%, from earnings of 179.2 cents per share reported by Rex True for the six months ended 31 December 2018 to earnings of 82.4 cents per share for the six months ended 31 December 2019; and
2. Rex True’s headline earnings per share (“HEPS”) will decrease by 15.4%, from headline earnings of 97.4 cents per share reported by Rex True for the six months ended 31 December 2018 to headline earnings of 82.4 cents per share for the six months ended 31 December 2019.
       The decreases in EPS and HEPS are mainly attributable to lower operating profits in the current reporting period exacerbated by the implementation of the new lease accounting standard (IFRS 16 Leases) (“IFRS 16”) which had a significant impact on the financial results of the Group’s retail segment, as well as once-off re-measurements occurring in the prior reporting period relating to the Group’s investment in SA Water Works Holding Company (RF) (Pty) Ltd.
       IFRS 16 became effective for year-ends beginning on or after 1 January 2019. Comparative results for the 2019 financial year have not been restated. The financial results before the impact of IFRS 16, based on the old lease accounting standard (IAS 17 Leases), are as follows:
1. Rex True’s EPS will decrease by 38.4%, from earnings of 179.2 cents per share reported by Rex Trueform for the six months ended 31 December 2018 to earnings of 110.3 cents per share for the six months ended 31 December 2019; and
2. Rex True’s HEPS will increase by 13.1%, from headline earnings of 97.4 cents per share reported by Rex True for the six months ended 31 December 2018 to headline earnings of 110.2 cents per share for the six months ended 31 December 2019.
       The interim financial results for the six months ended 31 December 2019 are anticipated to be released on or about 31 March 2020.
       The effects of the COVID-19 pandemic are changing rapidly and, while it is envisaged that there will be a significant negative impact on the Group’s revenue, performance and cash generation over the remainder of the financial year, the quantum thereof cannot be reasonably estimated at this time. The Group’s retail segment will no doubt be the most severely impacted due to the closure of the retail chain during the lockdown period. The preservation of cash, continuity of all segments of the Group as well as the health and well-being of our employees remain key focus areas over this period of uncertainty.

 

And now the good news...(there's always some)

Police minister thrilled about decrease in violent crimes during lockdown - Headline in News24 yesterday

 

They Said It

All quotes this week from Dr Clive Jackson-Moss, International School of Tanning Technology, a contributor to S&V African Leather Magazine and, as you can see, a rich source of They Said Its:
"You should see the amount of work I have brought home. Your articles are low priority!!!"

"But the real issue is, what the hell am I going to speak to my wife about for 3 weeks? I think there is going to be a murder in my house before the three weeks is up. I could be writing future articles from the prison here in Grahamstown!!!!"

"My to do list at home is growing faster than the virus is spreading!!!"

 

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the lockdown that you'd like to share with the industry? We will publish the throughout the lockdown, so please let us know. - tony@svmag.co.za

 

Updating the 2020 S&V Directory

I am using the lockdown to complete the 2020 edition of the S&V Directory. Something productive you could do with your lockdown time is to let me know if you have moved, had any other address or staff changes in the last 12 months. Please mail to tony@svmag.co.za.

 

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 $ Yuan Renminbi ¥
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
2020/01/25 R15.87 R18.82 R14.39 R2.07
2020/02/01 R16.54 R19.81 R15.00 R2.16
2020/02/08 R16.48 R19.41 R15.06 R2.15
2020/02/17 R16.16 R19.44 R14.90 R2.13
2020/02/22 R16.27 R19.43 R15.00 R2.13
2020/02/29 R17.27 R20.08 R15.66 R2.24
2020/03/07 R17.69 R20.44 R15.67 R2.26
2020/03/14 R18.04 R19.94 R16.25 R2.32
2020/03/21 R18.92 R20.50 R17.60 R2.48
2020/03/28 R19.63 R21.93 R17.61 R2.48
2020/04/04 R20.58 R23.37 R19.03 R2.68
Note: For previous rates, see HERE

 

 

 

ABSA Agri Trends: Hides & skins prices

Hide prices (March 25, 2020) - Please note: We will not be sending out any hide reports for the next 3 weeks due to the lockdown period. The hide markets will be closed. - Conce Moraba, agricultural economist, Absa group.

Hide & skin price progression
Date Hides/Kg Dorper/Skin Merino Skin
2020/01/03 1.38 35.00 46.67
2020/01/10 1.42 28.69 45.71
2020/01/17 1.35 30.74 45.71
2020/01/24 1.39 33.75 48.14
2020/02/07 1.36 33.47 47.50
2020/02/14 1.36 33.75 47.50
2020/02/21 1.32 33.75 47.50
2020/02/28 1.29 37.22 43.89
2020/03/06 1.29 36.50 43.50
2020/03/13 1.31 36.00 43.50
Note: For previous prices, see HERE
 

  

08/04/1946: Colin Pedlar, retired, formerly Reflex Footwear, Lesotho.
08/04/1965: Gregg Ripley-Evans, John Whittle Components, Pinetown.
09/04/1970: Rob McCann, Treadsafe, Pinetown.
09/04/1976: Carlo Grillenzoni, agent, Cape Town.
10/04/1948: Gert Muller, Sonop, Bethlehem.
10/04/1958: Ismail Shah, Evoné, Pietermaritzburg.
11/04/1957: Isak Jacob Viljoen, Health Shoes & Accessories Centre, Nelspruit.
11/04/1966: Melanie Rothman, BBF Safety Group, Pinetown.
11/04/1976: Janine Govender, Nikkita Footwear, Durban.
11/04/1997: Roberta Johnson, Chillisource, Durban.
12/04/1922: Harry Hoyte, retired, formerly Hoyte Shoes/agent, Durban.

 

In Memoriam this week

06/04/1979: George Cowie, GW Cowie & Co, Durban.
08/04/2011: Jack Katz, Treets Footwear, Johannesburg.

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:
Cape Union Mart, Cape Town, W Cape, SA. Outdoor and casual wear retailer:
Capital Fashion, Pretoria, Gauteng, SA. Corporate, health and school wear retailer:

 

Contact us

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

Next newsletter: April 13, 2020.

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

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