S&V Weekly Newsletter Vol.6 No.15, April 14, 2020

This Newsletter is sponsored by SAFLIA

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Chains seek end to retail standstill

Talks around local sourcing also to continue
Cape Town, W Cape, SA – The National Clothing Retail Federation of SA (NCRF) is in discussions with the government to restart fashion and other non-PPE related apparel retailing, executive director Michael Lawrence confirmed over the weekend.
       The NCRF represents Mr Price, PnP Clothing, Queenspark, the TFG Group, Truworths and Woolworths.
       "Our current engagements with government are confidential and will be shared once agreement is reached," he said. "There are a hell of a lot of things being discussed around the lockdown, its extension, and the period of recovery necessary, and there has been some movement - baby clothing has been designated an essential category. We're also arguing that with winter coming, people will need to buy the appropriate wear.
       "The position of Edcon, with its admission that it cannot guarantee to pay suppliers at this point, has further complicated the problems which were resulting from Covid-19."

He said chain retailers were also keen to take forward discussions around local sourcing in terms of the DTI-backed CTFL Masterplan. Discussions started before the lockdown, but have been put on hold during the lockdown.
       "The only matter I've put into the public domain for now is the request for Competition Act exemption to allow retail to have conversations which could be useful for supporting local manufacturing at scale," he said.
       "Chain retail needs to work primarily with substantial, volume manufacturers. Smaller and niche manufacturers can fit into the chain further down, in different ways.
       "Let's be blunt - we're not going to be able to save everyone. We need to try to save the best in terms of what they can produce, and also in terms of the maximum number of jobs, to get to a future which is sustainable."

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.
1. SA Covid-19 Relief Scheme Summary. See here.
2. Request sent by DTIC to CEO of FP&M SETA on behalf of industry. See here.

Zambeef starts mass face mask production

Lusaka, Zambia – Zambeef’s Zamshu shoe division is using its stitching expertise to make thousands of face masks to help protect people from the COVID-19 disease. The company has bought more than K100,000 of fabric and is aiming to make 25,000 protective masks over the next 8 weeks.
       A full report will appear in the May edition of S&V Footwear & Leather Goods.

Ihlobo Footwear: Extension for offers

Pietermaritzburg, KZN, SA – Following a request by the DTIC because of the lockdown, Berrangé Inc., the liquidator of Ihlobo Footwear, has granted an extension to local manufacturers to make offers on the equipment until close of business on May 1, professional assistant Marcel Nel confirmed last week.

NULAW statement on wages over lockdown

By Ashley Benjamin, general secretary, National Union of Leather and Allied Workers
Just a correction to your article with the heading: Manufacturers to ‘pay what they can ‘ over lockdown.
       Please note and correct that both SACTWU and NULAW supported the full pay proposal and were part of discussions with the 3 employer associations in the leather Industry until talks collapsed on the 25th march 2020.
       Also note that N.U.L.A.W have not concluded an agreement on payments with the 3 employer associations but engaged individual employers on request from our members to secure some payments on top of the UIF payments to be disbursed only after talks collapsed.

Death notice

Durban, KZN, SA – Malcolm Hill, who spent most of his long footwear career with Bata SA, died on April 3, aged 88, after a long illness. An obituary will be carried in the May edition of S&V Footwear & Leather Goods.

Stock Exchange News Service (SENS)

Woolworths - Covid-19 update and trading statement

The impact of the COVID-19 virus is being felt across all markets in which the Group operates. The Group is actively pursuing operational steps and considering strategic options to best mitigate the impacts of the crisis and to ensure the appropriate robust response in this developing situation.
       This update provides a perspective on current trading across our various business units and outlines the range of operational actions our teams are taking to address the impacts and mitigate business risk.
       Our first priority is the health and safety of our people, our customers and all our stakeholders, including our extended value chain. In terms of our stores, distribution centres and other operations, we are working closely with our health and safety partners, ensuring that all operations continue to conform to the highest level of hygiene and social distancing protocols. In respect of our employees, we have implemented a range of initiatives from alternative working hours to more flexible practices, including work-from-home, leveraging a full suite of technology tools.
       In terms of business performance, the temporary closure of non-food stores in accordance with applicable law and regulation, decline in foot traffic and consequent loss of trade are likely to have a substantial impact on our earnings and cashflow in the second half of our financial year ending June 2020 (“financial year”). We have considered and embarked on a range of actions and are implementing several key initiatives intended to mitigate some of these effects.
       There is a significant focus on facilitating trade and driving revenue including through online channels, given the current circumstances. We are also aggressively reducing costs, and managing inventory and working capital. Capital expenditure has been cut, with only critical projects moving forward. We have engaged with our suppliers to reduce apparel product intake and to extend payment terms. We are also meeting with landlords to explore alternative arrangements to current lease commitments, through the relevant period.
       In recognition of the challenging circumstances, the WHL Board, Group CEO and senior Executive team members have decided to forego up to 30% of their fees and salaries over the next three months. The savings arising from this will be used to provide additional financial support to staff who find themselves in extreme hardship as a result of the current crisis.

South Africa/Rest of Africa
The South African government announced a national lockdown which required the closure of non- essential businesses between 27 March 2020 and 16 April 2020 (“the current lockdown period”) and has implemented various regulations and directives which impact the manner in which we do business. We have, therefore, temporarily closed our Fashion, Beauty and Home stores and continue to operate only our Food stores. During the current lockdown period we will continue to remunerate all our staff, and those who are part of the essential workforce will receive an additional appreciation payment for the duration of the current lockdown period. Our business operations across other African markets have also been significantly constrained due to slowing demand, store and border closures in response to local government requirements and responses to the COVID-19 virus.

Australia/New Zealand
Our stores in New Zealand have been closed due to the lockdown enforced by the New Zealand government. Whilst Australia has yet to implement a full-scale lockdown, the government has, for several weeks, implemented significant restrictions on the movement and gathering of people and also limited businesses operations across many sectors. Although retail stores are not obliged to close, a number of Australian non-food retailers have announced the closure of stores, as a precautionary measure.

WHL Group earnings and trading statement
The Group fully endorses the actions taken by the governments in all the jurisdictions in which the Group operates in their efforts to contain the spread of COVID-19. The impact of the virus, including its socio- economic effects, will materially weaken the financial performance of the Group for this financial year.
       Given the fluidity of the current circumstances, including the uncertainty of the duration and impact thereof, it is not possible to quantify its impact on the Group's earnings. However, the Group remains committed and determined in its efforts to mitigate the reduction in earnings, optimise working capital and preserve cashflow and liquidity.
       Shareholders are advised that headline earnings per share (HEPS) for the 52-week period ending 28 June 2020 is expected to be more than 20% (more than 66.1 cents) lower than the reported HEPS for the comparable period in the prior year (2019 HEPS: 330.4 cents). A further trading statement will be issued in order to provide specific guidance once the Group is reasonably certain regarding the HEPS and earnings per share (EPS) ranges for the 52-week period ending 28 June 2020.
       The information contained in this announcement has not been reviewed or reported on by the Group’s external auditors.

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

SA mining industry, government and unions 'agree to sector reboot from 16 April' - Headline in Business Maverick, April 09.

They Said It

"Technically it's a Saturday, as my wife keeps reminding me. But if you send me a WhatsApp, I can say I'm going to the toilet or something and then I can check my emails." - National Clothing Retail Federation executive director Michael Lawrence.

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/

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.

13/04/1970: Jason Wilkins, agent/retailer, Johannesburg.
13/04/1976: Gareth Kemp, Apollo Brands, Cape Town.
14/04/1946: Pierre Lailvaux, formerly Service Agencies [closed], Durban.
14/04/1955: Bharatlal Ranchod, Ramjee's Shoe Store, Klerksdorp.
15/04/1971: Jacques Ergas, Red Planet Shoes, Cape Town.
16/04/1952: Russell Lochner, agent, Johannesburg.
16/04/1954: Lynn Sukool, Devan's Footwear Agency, Durban.
17/04/1948: Graham Althorpe, agent, East London.
17/04/1948: William James Mail, Norton Wellworth Agencies, Johannesburg.
17/04/1957: Colin Battle, agent, Port Elizabeth.
18/04/1976: Neelan Parumaul, Melton Adhesives, New Germany.
19/04/1946: Mike Pengelly, Trailmix Trading, Durban.
19/04/19??: Chris Beedle, Freestone Global Trade, Johannesburg.

In Memoriam this week

13/04/2014: Theuns JK Viljoen (b. 25/12/1942), Divac, George.
14/04/2015: Neville Horwitz (b. 25/11/1932), agent, Johannesburg.
16/04/2016: Barrie Walsh (b. 19/03/1949), Eddels Shoes, Pietermaritzburg.
19/04/2019: Raymond Manuel (b. 12/06/1963), Kronies (closed), Villani, Barker, Bolton Footwear, 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:
Capricorn Taxidermy, Polokwane, Limpopo, SA. Taxidermy:
Carina's Quality Clothing, Montagu, W Cape, SA. Family outfitter:

Contact us

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

Next newsletter: April 20, 2020.

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