S&V Weekly Newsletter Vol.6 No.20, May 18, 2020

This Newsletter is sponsored by SAFLIA

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Restarting retail

Baxter's: A good start, now back to 'normal'

Vanderbijlpark, Gauteng, SA – The first week was very busy, from Monday to Friday. Now it has slowed down to more-or-less what it was in March.
       Observing the regulations has been straightforward because I don't get lots of people coming to the store at the same time. We've been sanitizing their hands when they arrive, and everyone has been wearing masks. - Salim Tatel, member. Men's outfitter and men's and women's footwear. 1 store.

Bachelors Classic: 'Arrogant' customers a problem

Umhlanga, KZN, SA – This business is situated in a hotel complex, and the hotels haven't yet re-opened. I have, but business has been slow...on one day, I got a customer who spent R7000, but for the next 4 days I sold nothing.
       Following the sanitizing and distancing rules hasn't been difficult, but I have had problems with some arrogant shoppers who behave as if the rules don't apply to them, and I have had to ask them to leave.
       I've had to cancel some orders, which has really upset the suppliers, most of whom are selling imported items and who are taking a hiding. I expect to be in a position to re-order in 3 or 4 months' time, but it's going to be a slow process. - Suresh Parekh, member. Men's outfitter, 1 store.

Crossover: Rentals situation being resolved

Johannesburg, Gauteng, SA – The first week was good, but since then it has slowed down to below the levels of trading in March.
       Fortunately I'm not sitting on a lot of stock, and I haven't had to cancel any orders.
       Also, we have come to an arrangement with almost all our landlords. They've let us off 100% of April rentals, and for May, that varies between 50% and 75%. We're still talking to a couple of them. - Hashim Ismail, member. Mini-chain, 12 stores.

Restarting manufacturing
We asked a number of manufacturers: Is it now feasible for you to restart general production, or have you already restarted? What is your order position like, and have there been cancellations? Are any of your staff refusing to come back to work for any reason, and if so, what reasons? 4 have so far responded:

The Little Slipper Co: Some great orders

Port Elizabeth, E Cape, SA – We started up production with 25% of the workforce on the 6th of May after ensuring the factory met all the added regulations.
       We had most of the requirements in place prior to lockdown, but had to apply for the permit we require, clean the factory after being closed for so long and finalise the risk assessment.
       The following Monday we moved up to 35% and on the 18th we will run with just under 50% of the workforce.
It has been challenging trying to plan production whilst being restricted on workplace capacity, however we are grateful to be allowed to open again so we can generate an income to pay our staff and the bills.
       We are in a fortunate position to have orders to produce and the Government Gazette allows us to produce all the footwear we make so we are not restricted by seasonality.
       We have had some cancellations and reductions in orders, but have seen some great sales in the first two weeks of retail being back. Long may this continue.
       Overall the majority of staff have been very willing and eager to return to work.
       We do have some staff who are reluctant to return due to health concerns or co-morbidities that do not allow them to.
       Other members of staff cannot return as they have no one to care for their children.
       I believe we have to be as accommodating as possible in these difficult times. - Jacky Hay, COO

Fred Footwear: Cautiously optimistic

Port Elizabeth, E Cape, SA – The current lockdown constraints creates an operational challenge. We are still adjusting to the ‘new norm’. I suspect that an early start (albeit small) would create an opportunity to adjust in an incremental manner, in the context of the ‘new normal’.
            We are currently participants in the Industrial wear/PPE value chain. This sub-sector has been relatively defensive in comparison to the fashion footwear  sector. However, it is uncertain how long this will continue in the post-CV era. Hence, we remain cautiously optimistic.
       We have some employees hesitant to return to work. The rationale is attributable to health/infection concerns of exposure to the Virus, whilst we suspect that some employees are waiting for financial assistance from the Government. - Rolland Eboru, member  

Labora: We'll have to wait and see

Durban, KZN, SA – We've started with 30% of our staff. It's  never a productive environment but sometimes it's important just to keep the wheels turning. It's also unpleasant when you got to only choose 30% of the staff and leave the rest out of it.
       It's tough times but we will survive.
         The next few months are going to be difficult and we have to wait and see how the market reacts to the scaling down of the lockdown. - Desmond Chunderlal, production director 

Dick Whittington Shoes: Summer prices will be a challenge

Durban, KZN, SA – We are only working on essential goods at this time.
       General production is expected to commence by mid-June or even later.
       There is little point in talking about an order position as Winter 2020 is closed for all intents and purposes. We do however have existing orders, either in WIP or unplanned, with a few cancellations. The bigger challenge we face is carrying orders into Summer 2020 at winter prices. The losses are considerable given the ROE and labour cost adjustment effective 1 July.
       I am not aware of staff refusing to come to work yet. - Arveen Boodhoo, MD

2019 footwear stats

Supplied by SAFLIA
Production 2019 56.92 million pairs vs 2018 56.97 million pairs.
Employment 2019 10,622 vs 2018 10,924
Exports 2019 3.50 million pairs vs 2018 3.87 million pairs
Imports 2019 199.0 million pairs vs 2018 211.2 million pairs

  In summary total production 2019 vs 2018 was almost identical.
       Employment in 2019 was 2.8% down.
       Exports were 9.5% down on the revised figure for 2018 or 15% on the original figure of 4.13 million pairs.
       Imports were down 5.8%, so considering local production was almost the same (2019 vs 2018) it actually means a good result.

Plush takeover approved

By Gillian de Gouveia, Competition Tribunal
Pretoria, Gauteng, SA (May 13, 2020) – The Competition Tribunal has unconditionally approved the merger whereby Adcock Ingram Healthcare (Pty) Ltd (Adcock Ingram) will acquire Plush Professional Leather Care (Pty) Ltd (Plush).
       Adcock Ingram is a subsidiary of Adcock Ingram Holdings Limited. The acquiring group is a pharmaceuticals firm that manufactures, markets and distributes healthcare products. Of relevance to the transaction, is the acquiring group’s activity in the manufacture and supply of medical grade sanitisers and surface cleaners.
       Plush is a private company involved in manufacturing and distributing leather care and home cleaning products. Of relevance to the transaction is Plush’s activity in the manufacture and supply of “Plush Supreme” branded sanitisers and surface cleaners for household surfaces.
       The transaction does not present any competition or public interest concerns.
  On March 18, Adcock Ingram said:  Adcock Ingram is pleased to announce that it has concluded a Share Purchase Agreement to acquire 100% of the shares of Plush Professional Leather Care Proprietary Limited ('Plush' or the 'Business') for a confidential purchase price, payable in cash, (the 'Plush Acquisition').
       Plush is a well-established company offering an extensive range of homecare, cleaning and leather care products. Plush products are sold through most major retailers in South Africa and selected Southern African countries. Historically the Business generates revenue in excess of R200 million per annum.
       The Board of directors of Adcock Ingram considers the Plush Acquisition an attractive investment opportunity to enter the homecare category.
       Rationale for the Plush Acquisition:
- The Plush Acquisition is firmly in line with Adcock Ingram’s strategy of diversifying into less regulated product classes in the consumer sector. Further, Plush’s product portfolio has no overlap with Adcock Ingram’s existing portfolio. It will enable the establishment of a homecare business within Adcock Ingram that already has critical mass, allowing us to compete in this category in the Southern African market.
- The Plush brand is well established with strong support and awareness from both retailers and consumers. The brand has excellent potential for further line extensions into adjacent product categories.
- The existing senior management team, who are also the exiting shareholders of Plush, have been a crucial component of Plush’s success and continued growth over the last 10 years. As part of the transaction, this team has agreed to remain involved with the company for minimum periods of between 12 and 18 months. This will facilitate an orderly and sustainable transition of the Business into the Adcock Ingram group.
       The Plush Acquisition is not a categorized transaction in terms of the JSE Limited Listings Requirements. Accordingly, no shareholder approval is required to conclude this transaction and this announcement is published voluntarily.
       The Plush Acquisition is subject to regulatory and competition authorities approvals and other suspensive conditions typical for a transaction of this nature. A further announcement regarding the implementation of the Plush Acquisition will be made at the appropriate time.

Shoeperama in business rescue

Durban, KZN, SA – Mini-chain Dened cc, which trades as Shoeperama, was placed in Business Rescue on March 19, according to a circular last week from business rescue practitioner Neil Button of Stowell Estate Administration Trust in Pietermaritzburg.
       Commenting to the Newsletter last October, Dened member Eddie Lahee said the business had shrunk from 23 to 9 stores because of poor trading conditions.
       In his circular, Button wrote: "In light of the lockdown...the CIPC had suspended business rescue practices from 24 March to 30 April 2020...In light of the above, the business rescue practitioner was unable to adhere to the statutory time limits within which to convene meetings of creditors and employees." He wrote that a further notice would be communicated "shortly".

They Said It

Patel's 'winter footwear' ruling leads to a storm of ridicule

For example, open-toe shoes were not allowed to be bought or sold during the lockdown. "This strategy is not based in science and is completely unmeasured. [It's] almost as if someone is sucking regulations out of their thumb and implementing rubbish, quite frankly." - Dr Glenda Gray, a member of the Ministerial Advisory Committee (MAC) and chairperson of the South African Medical Research Council (SAMRC). She said further: The lockdown should be eradicated completely, and that non-pharmaceutical interventions (NPI), such as handwashing, wearing masks, social distancing and prohibitions on gatherings, should be put in place.   

"The DA is stunned by the bizarre and extraordinary clothing list that has been gazetted by Patel, which seems to have been plucked from Alice in Wonderland... [the new clothing regulations were] frankly mad and seem more at place during the 1980s under the Soviet Union than they do in a democracy like South Africa...According to the regulations, you can buy shirts so long as they are promoted ‘to be worn under jacket coats and/or knitwear’, which is ridiculous and insulting to South Africans’ intelligence. You may only buy crop bottom pants so long as they worn with boots and leggings, which is just ridiculous, and finally, you can only buy ‘closed toe’ shoes, which is just laughable." - DA MP Dean Macpherson - https://citizen.co.za/

"Look at the regulations about the sale of clothing that were published today: you aren’t allowed to sell T-shirts or flip-flops? What is this? It is not rational." - Former Minister of Finance Trevor Manuel - https://www.news24.com/

And some support

From a report in https://www.bizcommunity.com/ "The federation has participated in a robust engagement with government and stakeholders to construct the list of essential consumer items for winter clothing and textile items. The leadership of Minister Patel has been appreciated throughout the consultations." - Anthony Thünstrom, CEO of TFG and chair of the National Clothing Retail Federation.   

"I have been extraordinarily impressed with the Minister’s handling of the regulations relating to the complexities of opening retail stores to sell winter clothing. His unwavering focus was on protecting the health of South Africans during the cold winter months." - Michael Mark, CEO of Truworths

"We are most appreciative of the manner in which the Minister and his advisors have applied and conducted themselves. An outcome which will ensure a wide range of winter clothing will be accessible to all is surely the correct one. This will protect our country’s citizens in the upcoming winter months." - Mark Blair, CEO of Mr Price Group

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

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

Johannesburg, Gauteng, SA (May 12, 2020) - The current average hide price decreased by 7.3% to R0.82/kg from R0.89/kg green a week ago. The current price, however, is 11.1% lower than the average price a month ago and is 51.9% lower than the average price a year ago. Currently there isn’t much of a market for hides locally and globally. The standstill in the local  automotive sector, of which the leather and hide industry is largely dependent on, has resulted in almost no sales across South Africa. For the coming weeks, a very significant % of the local hides won’t be taken up by the leather industry. The local hide market is expected to remain under immense pressure. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Conce Moraba, agricultural economist, Absa group.

18/05/1969: Andrew Lofthouse, Leather Systems, Port Elizabeth.
18/05/1974: Rudolph de L Volschenk, Leo D’ Mar, George.
19/05/1965: Pierre van Niekerk, left the industry, formerly Midland Leather KZN (Gringo), Port Shepstone.
19/05/1970: Chalkie Harrower, C&B Harrower Agencies, Johannesburg.
20/05/1934: Diana Beckley, retired, formerly agent, Durban.
21/05/1949: Norman Norris, retired, formerly Urban Zone, Randburg.
21/05/1949: Donald Blanshard, Foot Fashion, Johannesburg.
22/05/1958: Craig Wells, Sidison Footwear Cape Town.
22/05/1972: Cindy Dunbar, Naked Feet, Durban.
22/05/19??: Dr Willem Burger, SAOBC Ostrich Research, Oudtshoorn.
22/05/1973: Farai Musungwa, Safety-Quip Botswana, Francistown.
23/05/1950: Dean Padayachee, Daylan Footwear, Durban.
23/05/1965: Craig Harper, left the industry, formerly Egoli Gumboots, Amanzimtoti.
24/05/1965: Wayne Stanford, agent, East London.
24/05/1970: Carla Maritz, Mott! Shu’s, Pretoria.

In Memoriam this week

19/05/2009: Robbie Trench (b. 28/03/1945), Panama Shoes, RPM Footwear (both closed), Durban.
21/05/2019: Theo Heffer (b. 06/12/1934),Association of SA Manufacturers of Luggage, Handbags & General Goods, Johannesburg, SA.
23/05/2012: Chris van der Merwe, Oasis Tanning, Krugersdorp.
24/05/2013: Casper Louw (b. 11/04/1944), Busy Bag [closed], Stanger.

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:
Castelo Shoes, Johannesburg, Gauteng, SA. Women's imported footwear:
Cathrine's Bridal Couture, Stellenbosch, W Cape, SA. Bridal wear.

Classified Adverts

URGENT APPEAL FOR A DISCARDED LAP TOP

PASTOR, LEADER OF A POOR  RURAL COMMUNITY IN SWAZILAND  - WHO’S LAP TOP WAS THE ONLY COMMUNICATION TO THE OUTSIDE  WORLD -  IS IN URGENT NEED OF A REPLACEMENT AFTER HIS WAS BROKEN.  PLEASE CAN ANYBODY  HELP?
HE IS ALSO TRYING TO RUN A COLLEGE FOR LOCAL STUDENTS WITH VERY LIMITED RESOURCES SO EVEN IF YOU DON’T HAVE ONE NOW PLEASE COULD YOU BEAR HIM IN MIND FOR THE FUTURE?

Please follow the link to see more about his community
www.christianlifecollege.com
Click on:
Steppin’ Out Trust
Ministry & Mission video’s
See also the newsletter for up to date information.
If you are able to help please reply to: joanne@svmag.co.za and I will ensure that it reaches its destination.

Contact us

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

Next newsletter: May 25, 2020.

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